Why the Commonwealth Bank (ASX: CBA) share price is on watch today

The Commonwealth Bank of Australia (ASX: CBA) share price is one to watch after an update on its 2016 BBSW class action.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A pre-market announcement has put the Commonwealth Bank of Australia (ASX: CBA) share price on watch in early trade.

woman looking up as if watching asx share price

Image source: Getty Images

Why is the Commonwealth Bank share price on watch?

Investors will be keeping an eye on the Aussie bank share after an update on its US-based class action. Commonwealth Bank this morning announced that it has reached agreement to settle the ongoing US Bank Bill Swap Reference Rate (BBSW) class action.

The class action commenced in 2016 in the New York District Court against Commonwealth Bank, other banks and brokers. Commonwealth Bank has today reached a settlement in relation to the US BBSW rate rigging allegations.

It becomes the latest of the Big Four banks to do so. Westpac Banking Corporation Ltd (ASX: WBC) settled its US class actions in October 2020 while Australia and New Zealand Banking Group Ltd (ASX: ANZ) reached a settlement yesterday.

What else has been happening for Commonwealth Bank?

The Commonwealth Bank share price will be one to watch in early trade following this morning's update. Shares in the Aussie bank fell last week in a softer week of trade for the S&P/ASX 200 Index (ASX: XJO).

That share price slide came despite a big announcement from Australia's largest bank. Commonwealth Bank announced it intends to launch its own buy now, pay later (BNPL) service to customers by mid-year. 

The service will be offered through any merchants who accept credit or debit card payments, enabling people to pay off their purchases (up to $1,000) in instalments, similar to other BNPL offerings.

That put shares like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) under pressure late last week amid increased competition fears.

Foolish takeaway

The Commonwealth Bank share price will be one to watch in early trade after becoming the latest bank to settle 2016 class actions relating to BBSW products.

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

A man in his 30s with a clipped beard sits at his laptop on a desk with one finger to the side of his face and his chin resting on his thumb as he looks concerned while staring at his computer screen.
Bank Shares

Forget CBA shares — here are 2 ASX bank shares I'd rather own right now

CBA shares are trading in the green again today, but I'd still pick these two ASX bank shares instead.

Read more »

Nervous customer in discussions at a bank.
Bank Shares

Why are NAB shares sinking 4% on Monday?

Let's see what NAB has announced on Monday.

Read more »

A woman wearing a yellow and white striped top and headphones plays excitedly with her phone.
Bank Shares

5 reasons to invest $500 in CBA shares

For long-term investors, reliability and scale can matter more than short-term valuation.

Read more »

Australian dollar notes and coins in a till.
Dividend Investing

How many ANZ shares do I need to buy for $10,000 a year in passive income?

ANZ shares have a lengthy track record of paying two dividends a year.

Read more »

View of a business man's hand passing a $100 note to another with a bank in the background.
Bank Shares

In the midst of economic turmoil, what does Morgan Stanley say the ASX banks are worth?

The economic headwinds are building.

Read more »

Three children wearing athletic short and singlets stand side by side on a running track wearing medals around their necks and standing with their hands on their hips.
Bank Shares

ANZ, NAB, Westpac, and CBA shares: Analysts rate 3 to sell, and 1 to buy

One ASX bank stock stands out from the rest.

Read more »

Three businesspeople leap high with the CBD in the background.
Bank Shares

Macquarie shares soar 21% to a 52-week high: Buy, sell or hold?

The investment bank's shares climbed higher again on Wednesday. Here's what analysts expect from the stock next.

Read more »

Woman leaping in the air and standing out from her friends who are watching.
Bank Shares

$5,000 invested in CBA shares two years ago is now worth…

It shows you don’t need high-risk growth stocks to build wealth.

Read more »