The National Australia Bank Ltd. (ASX: NAB) share price is treading lower during mid-afternoon trade. This comes after the Australian banking giant announced an update to the class action launched in the United States.
At the time of writing, NAB shares are fetching for $26.84, down 0.63%. In comparison, the S&P/ASX 200 Index (ASX: XJO) is sitting at 7,384 points, 0.3% higher.
What happened?
In a statement to the ASX, NAB advised it has reached an agreement to settle the Bank Bill Swap Rate (BBSW) class action complaint.
The lawsuit, filed in the United States District Court in August 2016 alleged that NAB and along with other financial institutions manipulated the BBSW. This is a short-term interest rate used as a benchmark for pricing derivatives and securities, most notably floating rate bonds. In laymen's terms, NAB may have generated a large amount of cash from artificially fixing BBSW-based derivatives prices that benefited its trading books.
Although the claims were dismissed against NAB on jurisdictional grounds in February last year, the bank proceeded with a settlement. It feared that the dismissal could be reversed and the claims would be reinstated in the future.
NAB stated that the settlement is agreed upon without admitting any liability and remains subject to negotiation and court approval.
No financial details were given, as the bank said that the terms of the settlement are confidential. However, NAB did note that it had previously raised funds in regards to the complaint, and the financial impact is not substantial.
NAB share price summary
Over the past 12 months, NAB shares have done quite well, gaining more than 40% for investors. Since the start of 2021, the company's share price has risen close to 20%.
NAB currently stands as the ASX's 5th biggest company in terms of value, with a market capitalisation of $88.7 billion.
