The loans were allegedly funneled through a single agent who used the proceeds to invest in 91 Shanghai apartments, including the Shimao Riviera Garden, one of the city's most expensive residential complexes, according to Xinhua news agency.

Shen Lu, who works in the bank's Shanghai branch, told Shanghai Daily yesterday that the lender's internal auditing department is still addressing the issue.

"It might take more time before details can be released," he said.

The first signs of trouble surfaced last October when an internal audit turned up a housing loan that had not been secured by a property mortgage, according to Xinhua.

The borrower was identified as a Qu Huping, the news agency said. Concern mounted when auditors found that Qu had acted as an agent on 91 home loans from 2004 to 2005, mostly involving the bank's Lujiazui branch.

The combined amount was reportedly 400 million yuan, which was used to buy high-end downtown properties in the pricey Huangpu and Luwan districts and Pudong New Area. And most of those loans were unsecured.

Qu allegedly used other people's ID cards, purchased from other cities, to apply for loans. The lender found that although Qu used different names to register the loans, the property rights for the apartments purchased were all transferred to the Youjia Investment Management Co. Qu was reportedly an employee of the company.

The bank has since taken over 50 apartments, including 35 in Shimao Riviera Garden, for which it did hold mortgages.

In an earlier case of loan fraud, an individual identified as Yao Kangda borrowed more than 71.4 million yuan from a branch of the Industrial and Commercial Bank of China in the Waigaoqiao Free Trade Zone from 2002 to 2003 to buy 128 Shanghai apartments.