ANZ Group Holdings Ltd (ASX: ANZ) shares are under pressure on Friday morning.
At the time of writing, the banking giant's shares are down 1% to $29.82.
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What's going on with ANZ shares today?
This morning, the big four bank revealed that it has reached an agreement to settle two class actions brought against it back in 2020.
One of the class actions related to the investment of superannuation funds with ANZ, when the bank owned OnePath Custodians and OnePath Life.
The class action alleged that the trustee of these super funds breached its duties to members by charging excessive fees in order to pay unnecessary commissions to financial advisers, resulting in high fees for no additional benefit to members.
It also alleged that the trustee breached its duties in relation to the investment of funds that members deposited in cash investment options. The trustee deposited these funds with its parent bank, ANZ, rather than shopping around for better interest rates, resulting in inadequate returns for members.
ANZ has now settled this class action and will contribute $14 million.
OnePath's new owner, Insignia Financial Ltd (ASX: IFL), acknowledged the news and noted that it "is made without any admission of liability or wrongdoing by any of the respondents."
What else?
Another class action that has been settled today is the Esanda class action, also known as the Flex Commission class action. Westpac Banking Corp (ASX: WBC) was also part of the class action. ANZ completed the sale of its Esanda Dealer Finance portfolio in 2016.
Flex commission arrangements allowed car dealers to set the interest rate and loan term on car loans. This meant that the higher the interest rate and the longer the loan term, the greater the commission received by the dealer.
This class action alleged that flex commissions were unfair and unlawful and resulted in consumers paying higher interest rates on their car loans than they otherwise would have. This was for loans taken out during the period from 1 January 2011 to 31 March 2016. The class action sought compensation and other relief for those who have been affected.
Today's update reveals that the bank will pay $85 million for the settlement of the Esanda class action.
The good news for shareholders is that these amounts are not a surprise to management. The settlement sums are already covered by existing provisions held on 30 September 2024.
ANZ also stressed that the settlements are without admission of liability.
