National Australia Bank (NAB) has booked a further $830 million (£400 million) in losses because of American mortgage debt.

Its shares fell by 15% after the news was announced. The NAB has said the global credit crunch was to blame and that the figures were based on a worst case scenario of a "meltdown" of the US mortgage market. However, it is reported that fund managers questioned managers over the bank’s remaining securitised assets during a briefing.

John Stewart, Chief Executive of the NAB group, said: "This incident is a direct result of the meltdown going on in the US housing market. (That) has been further highlighted in recent weeks with foreclosures mounting and recovery rates from securities in some categories falling to less than half of the loan value."

He continued, explaining that even some of the debt securities rated as highest quality have been affected by the credit crunch, "It's very hard to say to people that buying 'AAA' assets was reckless. If we wouldn't invest in 'AAA' assets, then quite frankly we wouldn't invest in any Australian company, we wouldn't lend to any of them."