TEL AVIV - Bank Hapoalim, Israel's second-largest bank, said on Tuesday it raised a total of 1.6 billion shekels ($408 million) in a two-part offering of deferred capital notes.

It raised 1.3 billion shekels in an offering to institutional investors last week and another 300 million in an auction to the general public on Tuesday.

The bank said it received more than 2.6 billion shekels in demand over the two parts of the offering.

The first series of notes, for six years, linked to the consumer price index and bearing annual interest of 4.3 percent, raised 635 million shekels.

The second, for eight years, unlinked and paying 2.3 percent above one-year bills, raised 965 million shekels.

Since the start of the year, Hapoalim has raised 2.5 billion shekels from institutional investors and the public in Israel and abroad.

The offering will help boost Hapoalim's capital adequacy ratio, which was at 11.27 percent at the end of March. Israeli banks are required to raise their ratios to 12 percent by the end of the year.

Bank Leumi (LUMI.TA), the country's largest commercial lender, raised 1.2 billion shekels in an offering of deferred capital notes two weeks ago.

($1 = 3.92 shekels)

(Reporting by Tova Cohen; Editing by Erica Billingham)

Israel