The pending action seems likely to be limited to US investors, who primarily hold NAB securities in the form of American Depositary Receipts.
According to the complaint filed in US District Court for the Southern District of New York, NAB’s HomeSide arm had “knowingly used unreasonably optimistic valuation methodologies” in modelling its $US180 million mortgage servicing portfolio.
NAB said last month the case was “without merit, should not succeed and is not likely to have a material adverse effect”. It would be vigorously defended.
NAB has since exited its HomeSide exposure, but lost a total of close to $4 billion in several instalments after it misjudged the impact of successive interest rate cuts on the value of so-called mortgage servicing rights.