Commonwealth Bank of Australia, the country’s second-largest lender, warned investors to expect a big jump in bad debts and voiced concerns over the economic outlook for at least the next 18 months.

The bank, which recently bought local rival BankWest from stressed UK bank HBOS , issued the warning saying that bad-debt charges would make a major dent on its half-year performance to end-December.

It blamed just three failed companies -  Lehman Brothers and two local firms - for much of the forecast increase in bad-debt provisions.

”………..the group’s exposure to Lehman Brothers, Allco Finance Group and ABC Learning Centres will result in significantly higher first half provisions,” the bank said.

Commonwealth has $240 million in senior debt exposure to collapsed child-care group ABC Learning Centres and a $170 million exposure to collapsed investment firm Allco.

Australian banks are battling tough global credit markets, a slowing domestic economy and risk of rising defaults among Australian corporate borrowers.

Industry analysts expect Australian banks’ bad debt provisions to rise in the months ahead, and expect a number of the banks would have to raise capital. The country’s biggest lender, National Australia Bank , raised $3 billion in a fully underwritten share issue this week.

The bank raised $2 billion in an institutional share placement last month to help fund its $2.1 billion acquisition of British bank HBOS’s Australian unit BankWest