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The Serious Fraud Office (SFO) is investigating an alleged £56 million fraud on Allied Irish Bank (AIB).

Yesterday the SFO and the City of London Police launched raids on two residential addresses and one business in central London as a part of the investigation.

The case centres on loans provided by AIB between 2003 and 2007 for the purchase of a number of UK investment properties.

Last year AIB revealed guarantees on lease payments for properties where finance was provided from a blue chip property company were fraudulent.

The bank has now taken control of the properties and sold them off – taking a £56 million write down on existing loans.

However, an SFO spokesperson warned that further financial institutions have also been deceived by the suspects.

"At this early stage of investigation we suspect AIB is not the only institution targeted.

"At the moment we know of one or two other institutions involved… but it could be more financial institutions have been targeted," he said.

The SFO alleges the suspects boosted the value of their properties by claiming leases on them were for longer periods and higher rents than were in fact in place.

The SFO, which only investigates more complex cases of suspected fraud, is currently investigating a number of other cases of property fraud and next week will see the sentencing in a case of buy-to-let fraud in Newcastle.

The spokesperson added: "When fraud is uncovered and suspected, the SFO will give it our full attention."