National Australia Bank has been threatened with a ratings downgrade by Fitch, the international ratings agency, after admitting that losses arising from "fictitious trades" in foreign currency options, could turn out to be much higher than originally estimated.

NAB, led by chief executive Frank Cicutto, is planning to hold talks with Fitch about its financial position following the discovery last week that rogue traders in its currency option trading team had run up a sizeable loss on trades in the Australian and New Zealand dollars.