Commonwealth Bank and its wealth management arm Colonial First State have been hit by a class action law suit over allegedly uncompetitive superannuation returns.
Law firm Slater and Gordon has filed proceedings in Federal Court and claims damages could exceed $100 million for hundreds of thousands of superannuation members.
The action alleges Colonial First State invested the retirement savings of its members with its parent bank, where the cash received uncompetitive bank interest rates.
CBA said it and Colonial First State will vigorously defend the proceedings.
"We will allege that by dumping members' super with its parent bank, the CBA, Colonial First State failed to obtain the most competitive interest rate available for its members invested in cash-only investment options and balanced options where there is a cash component," Slater and Gordon head of class actions Ben Hardwick said on Wednesday.
"The class action will allege there is no excuse for Colonial First State to have accepted such a low rate from CBA when it could have easily obtained a higher rate - either from the CBA or from any other bank."
Trustees are required by law to act in the best interests of super fund members.
"This class action will allege Colonial First State placed the interests of its members beneath the interests of the Commonwealth Bank," Mr Hardwick said.
Nonetheless, an independent report into Commonwealth Bank's response to APRA's damning inquiry into its culture and governance said the bank is laying "the foundation of a successful risk remediation program".
The lender on Wednesday released Promontory Australasia's first progress report into CBA's reaction to the recommendations that followed the Australian Prudential Regulation Authority's assertion that Australia's largest bank was insular, complacent and blind to threats.
The report said the bank's size meant progress will be long and complex, but made positive noises.
"Promontory observes that to date, CBA's design and management of the program evidences a commitment to meeting the challenges described in the inquiry report in a timely and comprehensive way.
"Furthermore, the foundation of a successful risk remediation program is being laid."
CBA chief executive Matt Comyn, who took charge this year when Ian Narev retired following a series of scandals including AUSTRAC's allegations of money-laundering law breaches, said progress was being made.
"We understand there is still a lot to do and remain committed to implementing our plan in full and on time," Mr Comyn said.
"We recognise that ultimately, we will be judged by the improvements we make in customer and risk outcomes."
CBA said along with CFSIL it would vigorously defend the Slater and Gordon proceedings and keep the market informed of developments.
