Sydney - Australian shares tumbled Friday after losses on Wall Street and an announcement by National Australia Bank that it was increasing provision for debts linked to mortgage-backed securities in the United States.

The ASX 200 lost 3.3 per cent, falling 173 points to 4,970.

National Australia Bank shares fell 14 per cent and dragged down other financial stocks. ANZ plunged 9 per cent, Commonwealth Bank 6 per cent and Westpac 5 per cent.

National Australia Bank chief executive John Stewart said it was best to plan for the worst.

"What we're doing is looking at the trend in the States and saying it's just going to get worse, so we would rather take it now than wait until it plays out over the year," Stewart said after the bank announced it was earmarking 830 million Australian dollars (793.1 million US dollars) to cover losses from its US mortgage assets. (dpa)