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National Australia Bank pays $88-M in class action settlement

A purely commercial decision made.

This is how National Australia Bank's company secretary Michaela Healey describes the settlement reached by NAB made in the interests of its shareholders to settle a shareholder class action.

This was in relation to its losses over toxic subprime home loans in the United States.

NAB has agreed to pay AU$85 million or US$88.4 million plus an allowance in respect of interest and costs in full and final settlement of the class action, the bank said in a statement.

Legal action was taken by a group of shareholders who acquired NAB shares in the period January 1 to July 24, 2008, and related to NAB's exposure to certain financial derivatives.

In 2006, NAB bought 1.2 billion AU dollars of collateralized debt obligations that were heavily exposed to the U.S. subprime residential mortgage market, which became toxic debt in 2007 and early 2008, according to the law firm leading the class action, Maurice Blackburn.

NAB's company secretary Michaela Healey said the settlement of the class action was a purely commercial decision made in the interests of NAB shareholders.

The settlement is subject to approval of the Supreme Court of Victoria.

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