HBOS was under pressure from shareholders last night to provide more details about its exposure to struggling British housebuilders after a company that formed one of the bank’s big investments called in restructuring experts.

The UK Shareholders’ Association (UKSA), whose members form part of HBOS’s 2.1 million army of retail investors, said yesterday that the bank should be more forthcoming about potential losses on its property investments, including whether it has written down the value of any of its assets.

The call came as HBOS, which has lent £40 billion to construction and property companies and has bankrolled some of the industry’s consolidation, prepares to write to its investors with details of its £4 billion rights issue.

HBOS, Britain’s fourth-largest banking group, is due to update City investors on trading this week.

Concern arose after McCarthy & Stone, the specialist retirement homes builder, drafted in NM Rothschild as an adviser amid questions over its ability to service its £800 million debt. HBOS joined forces with Sir Tom Hunter, the Scottish property entrepreneur, to buy McCarthy & Stone for £1.1 billion two years ago. HBOS owns 20 per cent of the builder’s equity and is exposed to £80 million of its debt.

Rothschild will examine options for McCarthy, which has been hard hit by the slowdown in the housing market, ahead of key debt repayment dates beginning in 2012. The company, led by Howard Phillips, the chief executive, held talks with investors including HBOS last week.

HBOS is not the only bank to be exposed to the vagaries of the property market. Property represents 37 per cent of the bank’s loan book, against an industry average of 38 per cent. Barclays, HSBC, Royal Bank of Scotland and Lloyds TSB also face substantial risks as commercial lenders to property companies.

However, unlike most of its rivals, HBOS often takes equity stakes in the companies to which it lends. As well as McCarthy, it owns shares in Crest Nicholson, Cala, Keepmoat, Apollo, Miller Group and Tulloch. It has a debt exposure to construction firms of £3.3 billion, in addition to undisclosed equity holdings.

A spokesman declined to be drawn on whether HBOS would provide further detail on its property exposure this week. It is understood that the bank does not own shares in Barratt Developments, Taylor Wimpey or Persimmon.

Shares in housebuilders slumped last week amid fears that they could be hit by the cooling property market and, in some cases, could breach their debt covenants.

Roger Lawson, a director at UKSA, said that individual investors considering whether to subscribe to HBOS’s rights issue wanted more detail. “Small shareholders are being asked to put up more money in a company that has got into difficulties. It is up to the company to convince shareholders why they should buy in.”

He added that although the UKSA would not condemn Bradford & Bingley, the buy-to-let mortgage specialist, it would make clear today that it disapproved of the terms of its £400 million rights issue. Preferential terms are being granted to TPG, the American buyout firm that is taking a 23 per cent stake in Bradford & Bingley for £179 million.

HBOS shares briefly fell below the 275p rights issue price last week after the bank was targeted by short-sellers. Shares closed at 321p on Friday, valuing the bank at £12 billion.

A spokesman declined to be drawn on whether HBOS would be willing to provide further details on its property exposure.

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