MELBOURNE, Australia--National Australia Bank Ltd. (NAB.AU) aims to raise a hefty 5.5 billion Australian dollars (US$4.4 billion) to shore up its capital reserves and move ahead with plans to spin off and list its U.K. banking business.

The capital will be raised through a 2-for-25 accelerated rights issue, the bank said Thursday. NAB also plans to release a further A$500 million in capital by reducing the lender's exposure to retail life insurance through a reinsurance arrangement.

Separately, NAB reported a 20% jump in first-half net profit to A$3.44 billion in the six months through March, from A$2.86 billion a year earlier. It also said Ken Henry had been appointed the successor to Michael Chaney, who plans to retire as chairman at the Melbourne-based bank's annual general meeting in December.

NAB, which is refocusing on its core Australian and New Zealand franchises, said that while it remains open to a trade sale for its U.K. banking operations, its plan is to spin off as much as 80% of the business to shareholders and sell the remainder through an initial public offering by the end of this year.

Write to Robb M. Stewart at robb.stewart@wsj.com

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