National Australia Bank Ltd, the country's third-largest lender, asked investors for A$3.5 billion ($2.2 billion) and cut its dividend on Monday as first-half profit tumbled in part due to charges associated with the coronavirus pandemic.

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The planned capital raising is the biggest by an Australian company since the outbreak of coronavirus which has killed 83 people in Australia and shut down large parts of the world's 12th-biggest economy.

The decision to pay a dividend comes after the financial regulator urged banks to consider postponing shareholder payouts until the impact of the pandemic was better known. NAB is the first Australian bank to report its results since the pandemic arrived in the country.

The bank cut its interim dividend to 30 cents per share, from 83 cents in the previous first half. The move may influence dividend decisions from other large lenders which are scheduled to report profits over the next month.

"We are acknowledging that retail shareholders are in the stock for the dividend and do require it," CEO Ross McEwan said on a media call.

"It was a balancing act," added McEwan, who started in the role in December and has taken a 20% cut in his base pay to reflect the pandemic crisis.

NAB shares were in a trading halt while it sought to raise A$3 billion from institutional investors and another A$500 million from retail investors. Shares of rival lenders Commonwealth Bank of Australia, Westpac Banking Corp and Australia and New Zealand Banking Group Ltd were down more than 2% in a flat overall market.

For the six months to end-March, NAB said underlying net profit dived 51 percent to A$1.44 billion including an A$807 million charge "to reflect potential COVID-19 impacts".

The bank also took more than A$1 billion in one-off charges for writedowns on the value of its software and refunds to customers wrongly charged account-keeping fees, as previously foreshadowed.

"We have spoken to tens of thousands of small businesses and they're hurting badly ... and it was so sudden," McEwan said.

Though NAB is Australia's third-largest bank, it is the country's biggest small business lender.

McEwan said he would be surprised if anyone could accurately predict the timing and nature of the economic recovery after the coronavirus-related shutdown was lifted.

($1 = 1.5640 Australian dollars)