Commonwealth Bank of Australia settles class action for $249 million

Commonwealth Bank of Australia (CBA) has reached an in-principle agreement to settle a long-running class action lawsuit involving Colonial First State Investments and Avanteos Investments. The proposed settlement is valued at $249 million and is subject to final approval by the Federal Court of Australia.

The legal proceedings, initiated in 2018 by Slater and Gordon, concern certain cash and deposit options offered through Colonial First State superannuation and wrap products between November 2008 and September 2021. While the settlement has been proposed, CBA, Colonial First State Investments, and Avanteos Investments deny all allegations and have made no admission of liability or wrongdoing.

Following the announcement, CBA shares rose approximately 0.92% to $158.47. Investors reacted positively to the news, partly because the bank stated the $249 million settlement is already covered by a provision recognized in a previous period, meaning it will not impact current earnings. This follows a strong full-year result where CBA reported a 7% increase in cash net profit after tax to $10.98 billion.