Switzerland's Banque Cantonale Vaudoise (BCV) has revealed a potential exposure worth $49 million (SFr78.4 million) to a UK company embroiled in a fraud probe.
A statement released by BCV late on Wednesday said the bank did not yet know "its potential risks" and that it would do all it could to safeguard its interests.
The bank said it had financed a number of transactions with British-based Allied Deals PLC-RBG.
According to British media reports, Allied Deals is currently being investigated for a sophisticated in-house fraud scheme.
A report by The Guardian newspaper this week said police, lawyers and liquidators had launched a dawn raid on the company and its staff.
The paper reported the serious fraud office had said the raids were related to suspected false accounting and conspiracy to fraud, believed to be worth "many millions of pounds".
BCV said it had decided to reveal its potential exposure "in the interest of transparency".
"BCV is active in the financing of international commodity trading, and has financed a number of transactions originating with the company in question ever since 1998," the bank's statement said.
"At present, the total sum BCV has committed to business with this company amounts to $49 million."
BCV said this figure was made up of a "variety of different transactions, and for each transaction the financing was provided against different sorts of collateral".
"These events are still quite recent, and at this point in time BCV is unable to determine exactly what its potential risks in this matter are."
News of the potential exposure comes after a bad year for the bank. BCV said in March it was considering job cuts to create savings worth SFr40 million by 2005, after recording a net loss of SFr381 million in 2001.
Most of that loss was tallied-up after a series of bad debt write-offs.
BCV is one of the largest of Switzerland's 24 cantonal banks, with a balance sheet worth SFr36.1 billion.
The canton Vaud government controls 50.14 percent of the bank, which lends much of its money within the canton.
swissinfo with agencies