National Australia Bank stares down potential A$100 million class action lawsuit
Allegations that the NAB owned MLC Super Fund significantly overcharged clients have done little to impact the share price today.
The share price of National Australia Bank Ltd rose 1.28% during the day even as coverage of a potential A$100 million class action lawsuit against the bank grew.
The big four banks have faced intense scrutiny in recent times as the banking Royal Commission brought their treatment of customers and other cultural issues into the spotlight.
What's behind this potential A$100 million class action lawsuit?
Led by the law firms IMF Bentham and William Roberts Lawyers, the potential class action lawsuit alleges that the NAB owned MLC Super Fund charged excess fees to its customers over more than two years – from July 1, 2016 onwards.
According the law firms, the choice ‘to maintain payment of the Conflicted Charges from 1 July 2016 and the making of such payments, constituted a breach of its duty to act in the best interest of the members of the MLC Super Fund.’
Such allegations come in the wake of the Hayne Royal Commission, where NAB previously came under fire for charging millions of dollars of fees to customers for services that were never rendered.
All up and according to principal of William Roberts Lawyers, Bill Petroski, ‘on the available information, our understanding is that excess fees charged to MLC Super members likely exceeds $100 million.’
Potential consequences for NAB’s share price
Although the A$100 million figure just cited may seem large, it is likely to mean little in the broader scheme of things to NAB – which boasts a market capitalisation of A$78.2 billion.
Potential reputational damage from such a lawsuit is likely to rank as the bank’s main concern, opposed to any monetary damages that may potentially arise.
Moreover, while the Royal Commission revealed many questionable practices and actions of the big four banks – including NAB – it ultimately did little to dent their share prices.
Commissioner Hayne’s final report, which was released on February 4, 2019 – was received as a sign of relief for the big four and its investors. Following its release NAB’s share price has risen 11%, with others in the big four following suite. If this outcome is anything to go by, it’s not surprising that increased news of a class action lawsuit did little to the share price of National Australia Bank Ltd during today’s trade.
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