Why the Commonwealth Bank (ASX: CBA) share price is on watch today

The Commonwealth Bank of Australia (ASX: CBA) share price is one to watch after an update on its 2016 BBSW class action.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A pre-market announcement has put the Commonwealth Bank of Australia (ASX: CBA) share price on watch in early trade.

woman looking up as if watching asx share price

Image source: Getty Images

Why is the Commonwealth Bank share price on watch?

Investors will be keeping an eye on the Aussie bank share after an update on its US-based class action. Commonwealth Bank this morning announced that it has reached agreement to settle the ongoing US Bank Bill Swap Reference Rate (BBSW) class action.

The class action commenced in 2016 in the New York District Court against Commonwealth Bank, other banks and brokers. Commonwealth Bank has today reached a settlement in relation to the US BBSW rate rigging allegations.

It becomes the latest of the Big Four banks to do so. Westpac Banking Corporation Ltd (ASX: WBC) settled its US class actions in October 2020 while Australia and New Zealand Banking Group Ltd (ASX: ANZ) reached a settlement yesterday.

What else has been happening for Commonwealth Bank?

The Commonwealth Bank share price will be one to watch in early trade following this morning's update. Shares in the Aussie bank fell last week in a softer week of trade for the S&P/ASX 200 Index (ASX: XJO).

That share price slide came despite a big announcement from Australia's largest bank. Commonwealth Bank announced it intends to launch its own buy now, pay later (BNPL) service to customers by mid-year. 

The service will be offered through any merchants who accept credit or debit card payments, enabling people to pay off their purchases (up to $1,000) in instalments, similar to other BNPL offerings.

That put shares like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) under pressure late last week amid increased competition fears.

Foolish takeaway

The Commonwealth Bank share price will be one to watch in early trade after becoming the latest bank to settle 2016 class actions relating to BBSW products.

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

Bank building in a financial district.
Bank Shares

What happened with ASX 200 bank stocks like CBA and Westpac in March?

Buying ANZ, NAB, Westpac or CBA shares? Here’s what happened with the big four banks in the war-addled month of…

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Bank Shares

This is the only ASX bank stock I'd keep in my portfolio

I think this is the only ASX bank stock which will storm higher this year.

Read more »

A businesswoman in a suit and holding a briefcase marches higher as she steps from one stack of coins to the next.
Bank Shares

Why experts think this ASX bank share can rise 58% in a year!

This bank has a lot of growth potential, according to experts.

Read more »

A group of five people dressed in black business suits scrabble in a flurry of banknotes that are whirling around them, some in the air, others on the ground as some of them bend to pick up the money.
Bank Shares

Here's the dividend forecast out to 2028 for CBA shares

CBA could deliver impressive dividends in the next few years.

Read more »

A wad of $100 bills of Australian currency lies stashed in a bird's nest.
Dividend Investing

How many NAB shares do I need to buy for $10,000 a year in passive income?

NAB shares historically pay two fully-franked dividends every year.

Read more »

A woman looks questioning as she puts a coin into a piggy bank.
Bank Shares

Which ASX bank has the biggest dividend yield?

Bank shares are popular for income. Here’s which one currently offers the biggest dividend yield.

Read more »

Nervous customer in discussions at a bank.
Bank Shares

Why NAB shares are slipping today despite a major business reset

NAB shares drift lower amid broader pressure on the banking sector.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

Westpac shares are climbing following UNITE update

The banking giant's UNITE strategy is gathering momentum.

Read more »