National Australia Bank yesterday raised A$3bn (US$2bn) in what may be the first in a series of large equity fund raisings as Australia's leading banks strengthen balance sheets hit by bad debts.

UBS last week said Australia's top five banks - NAB, Commonwealth Bank of Australia, ANZ, and the soon to be merged Westpac and St George - had already set aside A$3.1bn to cover bad debts on a handful of bankrupt companies, including Allco Finance and ABC Learning Centres.