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NAB settles class action for $85m

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National Australia Bank (NAB) will pay $85 million in a settlement of a class action relating to its heavy losses over toxic subprime home loans in the United States.

The action, taken by shareholders, was settled on Friday, pending court approval.

NAB said it would pay $85 million, plus an allowance for interest and costs when the case is settled in full.

Those costs will be covered by insurance and existing provisions, and therefore will have an immaterial impact on NAB's earnings in the current fiscal year.