Bradford & Bingley directors have secured shareholder backing for their £400 million fundraising plans.

The rights issue of new shares will now proceed to boost the mortgage bank’s capital base.

Executive chairman Rod Kent welcomed the vote, saying: “We’re pleased that our shareholders have voted in favour of the enlarged rights issue, the proceeds of which will strengthen our capital base, ensuring we remain one of the better capitalised banks in the UK.”

About one million letters to qualifying shareholders informing them of their entitlement to new shares were being posted immediately after the extraordinary general meeting.

Fewer than 60 shareholders out of a total of 937,000 attended the meeting today in Sheffield, but it was enough to give the bank’s board some criticism.

Peter Hepworth, 54, a retired stockbroker from Doncaster, called on the directors to forego one-third of their pay for the way the company had been managed and the fundraising handled.

He said their remuneration had risen by 26 per cent as the value of the bank’s shares had slumped by more than 70 per cent, meaning that the Board had benefited while shareholders suffered.

Mr Hepworth said that shareholders were losing faith in the way the company was being managed.

Mr Kent said it was unlikely that B&B directors would be receiving any bonuses this year but the level of remuneration had to take account of market conditions to attract the right calibre of people. As chairman, he was not eligible for a bonus.

One shareholder who voted against the right issue plans was Michael Chappell, of Shipley, a retired Bradford magistrate.

He said: “I wanted to show my displeasure at the board. I think the directors should take a pay cut. There seems to be a lack of Yorkshire grit in the way the business is being run.”

In the end, however, the move to proceed with the rights issue based around a 55p price was passed by a huge majority with the number of votes in favour standing at 223,776,317 with 7,013,552 against, and the EGM took just 35 minutes.

Shareholders have until 11am on August 13 to register for the additional shares under the placing, with the rights issue due to complete in the last week in August. But take-up among B&B’s army of smaller private investors left from the bank’s demutualisation in 2000 is expected to be hit, unless shares rally back up past the 55p “discounted” price.

Mr Kent said: “The process of raising capital has not been a smooth or an easy one for Bradford & Bingley.

“We completely understand that this has not been a comfortable process for our shareholders, our customers and our employees.”

The mortgage market was cyclical with a downturn every decade, he said. “This is such a downturn. It will pass and if we keep our heads we will get through this,” said Mr Kent.

He emphasised that Bradford & Bingley was not “in dire straits”. It’s mortgage business was progressing “gently”, although mortgage arrears were rising, and savers were still depositing money, he said.

The bank’s share price was given a slight nudge upwards after the rights issue vote but the stock still remained below the issue price. It eventually closed at 54p.

e-mail: chris.holland@telegraphandargus.co.uk