NAB shareholders target $442mln in US subprime suit

Shareholders sued the bank for failing to report exposure and risk of losses from subprime mortgage exposure.

National Australia Bank Ltd. shareholders sued to recover about A$450 million ($442 million) they claim was lost as the bank’s stock declined because of its exposure to U.S. subprime debt in 2008.

Maurice Blackburn Lawyers, an Australian firm with 20 offices along the east coast, filed the lawsuit on behalf of shareholders on Thursday in Supreme Court in Melbourne.

National Australia Bank failed to disclose at the beginning of 2008 that it had “serious exposure and serious risk of losses,” from its subprime mortgage exposure, Andrew Watson, Maurice Blackburn principal, said at a news conference on Thursday.

National Australia Bank shares fell 36 percent from July 24, 2008, to Sept. 18, 2008, after the Melbourne-based bank boosted provisions for its exposure to U.S. subprime mortgages to A$1 billion (US$992.46 million) from A$181 million (US$179.65 million) in early May of that year. The bank held A$1.2 billion (US$1.19 billion) of collateralized debt obligations, structured debt securities that are backed by bonds or loans.

Shares of National Australia Bank were little changed at A$24.37 (US$24.19) at the 4:10 p.m close of trading today in Sydney.

View the full story in Bloomberg.