Commonwealth Bank of Australia (ASX: CBA) shares are back in the green on Wednesday after the banking giant announced a deal to settle a long-running class action.
At the time of writing, the CBA share price is up 0.92% to $158.47.
It has been a much tougher month for shareholders, with the stock down around 8% over that period. CBA shares are also roughly flat since the start of 2026 and remain around 15% below their 52-week high of $185.59.
Still, investors appear comfortable with today's announcement, with shares moving higher in morning trade.
Let's take a closer look at the release.
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CBA reaches $249 million settlement
CBA said this morning that it has reached an in-principle agreement to settle a class action involving the bank, Colonial First State Investments, and Avanteos Investments.
The proposed settlement is worth $249 million and still needs to be finalised and approved by the Federal Court of Australia.
The proceedings were launched in 2018 by Slater and Gordon on behalf of class members.
They relate to certain cash and deposit options issued by CBA and offered through Colonial First State superannuation and wrap products between November 2008 and September 2021.
However, CBA, Colonial First State Investments, and Avanteos Investments deny the allegations and have made no admission of liability or wrongdoing.
If the court approves the deal, eligible class members could receive a share of the settlement after legal fees and other costs are deducted.
Why are CBA shares higher?
A $249 million settlement does sound sizeable, but there's a key detail in the above announcement.
CBA said the proposed settlement is already covered by a provision recognised in an earlier period.
That means investors aren't looking at a new $249 million hit to current earnings, which likely helps explain why the share price has moved higher today.
The announcement also comes shortly after CBA reported another strong full-year result.
Cash net profit after tax rose 7% to $10.98 billion in FY26, while statutory profit increased 8% to $10.91 billion.
The bank also lifted its final dividend to $2.70 per share, taking the fully-franked full-year payout to $5.05 per share.
What next for CBA shares?
Today's rise is welcome for shareholders, but CBA shares still have ground to recover after falling around 8% this month.
The bank is also trading much closer to its 52-week low of $146.98 than the record levels it reached earlier this year.
Even after that pullback, CBA shares are not exactly cheap, trading on a P/E ratio of around 24. That still leaves the bank at a fairly high valuation compared with the other major banks.
The focus now is on whether CBA shares can keep moving higher after a difficult few weeks.
