Prime Minister Abdullah Ahmad Badawi pledged a full investigation Thursday of lending practices that led to severe financial losses incurred by Malaysia's largest Islamic bank.

Bank Islam's parent company, government-controlled BIMB Holdings Bhd., earlier this month reported a net loss of 456.4 million ringgit (US$121.7 million; euro100.8 million) for the financial year ending June 2005.

Government and company officials have indicated the losses were because of large provisions for non-performing loans given to companies in Sarajevo, Bosnia-Herzegovina and South Africa.

"What is important is that Bank Islam takes action fast so that the people would know the reasons behind the loss," Abdullah was quoted as saying by the national news agency, Bernama.

"Otherwise, people would think that we aren't taking action against those guilty and in the long run, they wouldn't trust the bank and this would jeopardize its integrity," Abdullah added. "We want the bank officers, first of all to show capability, integrity and proof of the highest level of professionalism."

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