National Australia Bank has provided the first insight into the damage the COVID-19 pandemic will do to the major banks, taking the axe to its dividend and announcing a $3.5 billion capital raising to ensure it can play its role as a shock absorber for the economy as the crisis unfolds.

NAB shareholders are taking a savage blow as the bank seeks to protect itself from rising loan losses from COVID-19. The interim dividend has been slashed to 30¢ a share, down from 83¢ last year, the lowest half-yearly shareholder return NAB has paid since December 1993.