Australian banks 'make losses' in the UK

15 August 2011

Two of the largest banks in Australia have made significant losses in the UK as a result of a disastrous loan agreement.

Commonwealth Bank and National Australia Bank - which is responsible to more than 460,000 shareholders - suffered a financial blow in the region of AU$150 million ($156 million) after the deal went bad within weeks of its approval, The Age reports.

Although Healthcare Locums - the biggest provider of casual medical staff in the UK - endured a significant share price fall following negative media attention regarding its acquisition plans and accounting operations, the firm was still handed the money.

The company had frozen trade on its shares in January and revealed plans to look into accounting irregularities within its books.

A source with knowledge of the loan process said the two lenders "have a track record for not really doing particularly thorough diligence when they finance [an international] transaction".

By Tony Aynsley

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