UPDATE 1-Rio wraps up rights issue, Australia demand strong

* Rio Tinto wraps up world's fifth-largest rights issue

* Underwriters to make handsome profit (Adds underwriters, background)

SYDNEY, July 3 (Reuters) - Global miner Rio Tinto (RIO.AX: Quote, Profile, Research) (RIO.L: Quote, Profile, Research) wrapped up one of the world's biggest rights issues on Friday, saying its Australian shareholders had taken up 94.76 percent of their entitlements to the new shares.

On Thursday, UK shareholders had taken up 96.97 percent of the deeply discounted, fully underwitten $15.2 billion rights offer, the fifth-biggest on record, putting the indebted Anglo-Australian group on a firmer financial footing.

The issue also marks a bonanza for the banks that underwrote it: Credit Suisse (CSGN.VX: Quote, Profile, Research), J.P. Morgan Cazenove (JPM.N: Quote, Profile, Research), Macquarie (MQG.AX: Quote, Profile, Research), Deutsche Bank (DBKGn.DE: Quote, Profile, Research), Morgan Stanley (MS.N: Quote, Profile, Research), RBS (RBS.L: Quote, Profile, Research) and Societe Generale (SOGN.PA: Quote, Profile, Research).

The underwriters of the two legs of the rights issue were paid a 2.75 percent fee, or around $420 million in total, and are now also making a substantial extra profit by selling the small portion of shares that were not taken up by existing investors.

In the UK, banks sold the "rump" on Thursday at 21 pounds, a 50 percent profit on the London rights-issue price. The stock closed in London on Thursday at 20.35 pounds.

In Australia, banks will be looking on Friday to offload about 7.87 million shares, worth about A$407 million ($324 million) at Thursday's closing Australian share price of A$51.75.

Rio Tinto's Australian shares have been halted from trade pending the sale of the rump Australian stock.