NAB says rogue deals cost $277m
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NAB chief Frank Cicutto admits rogue forex trades have cost A$360 million.
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SYDNEY, Australia (CNN) -- Australia's biggest bank, National Australia Bank, has admitted losing Aust. $360 million ($277 million) in rogue foreign exchange trades.
The loss is double the A$180 million the bank originally estimated it had lost when it revealed irregular trades in its foreign currency division on January 13.
NAB, the biggest of Australia's four largest banks, has extensive interests across Asia and in Britain.
With total assets valued at A$397 billion, it owns Britain's Yorkshire Bank, Clydesdale Bank, Pivotal and Northern Bank, as well as the National Irish Bank.
Assets in Asia cover Hong Kong and Indonesia, plus New Zealand.
A statement by the bank Tuesday said a detailed internal review, led by NAB chief executive Frank Cicutto, plus an investigation by the bank's external auditor, confirmed a post-tax loss of A$252 million.
The market, anticipating the increased total of losses, reacted calmly, adding 18c of 0.6 percent to the stock to A$29.59 in early trade Tuesday on the Australian Stock Exchange.
It was feared up to A$600 million could have been lost in the rogue trades.
Four traders -- three in Melbourne and one in London -- have been suspended for actions that date back to last October.
They had mistakenly bet the Australian and New Zealand currencies would fall against the U.S. dollar.
The Australian Securities and Investments Commission (ASIC) said late last week it would launch its own investigation.
The Australian Financial Review newspaper reports Tuesday the bank's international risk management had refused to "sign off" on reports of rogue trades for more than two months before senior management stepped in.
Mr Cicutto said in the NAB's statement: "We have worked as quickly as possible to identify all of the losses arising from the foreign currency options trading accurately.
"We will ensure that our ongoing position will be managed in a prudent and conservative manner.
"The foreign currency traders exploited weaknesses in our internal procedures. We have identified those weaknesses and closed them. We are conducting a comprehensive investigation into the matter and we will take whatever other action is necessary."
Cicutto promised NAB will pay a full-year dividend in line with market expectations and that the dividend will be fully franked in the first half.
The statement said NAB chairman Charles Allen closely monitored the investigations to "ensure a comprehensive and transparent assessment".
Mr Allen said: "We will provide the fullest possible account of the outcomes of the internal investigations when they are completed towards the end of February and ensure full responsibility is identified for the unauthorized foreign currency options trading."
