National Australia Bank Limited (ASX:NAB) and Commonwealth Bank of Australia (ASX:CBA) have reportedly lost as much as $150 million on a bad loan.
According to Fairfax the two banks lost the funds within weeks of the loan being approved after it was commissioned to British company Healthcare Locums at the end of 2010.
By the start of 2011 Healthcare Locums had stopped trading and an investigation was launched into ''accounting irregularities'' in the business.
The loan went ahead even though Healthcare Locums had suffered significant share price falls earlier in 2010.
Fairfax says NAB and CBA are now considering writing off most of the funds, though both banks have refused to formally comment on the matter.
National Australia Bank posted a net profit of $2.4 billion in the first half of its 2011 financial year.
NAB Price at posting:
$22.96 Sentiment: None Disclosure: Held
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