New National Australia Bank boss Andrew Thorburn has wiped more than $1 billion from the company's full year earnings in the latest effort to tidy up its troubled UK business.
The string of writedowns and provisions will cause a drop in the bank's profit for the second time in three years.
The latest charges - most of which are linked to previous misconduct in its UK subsidiary - will deliver an after-tax hit of $1.34 billion, which NAB will include in its underlying result for the year to September 30.
That will see the bank's full year earnings slump to between $5.1 billion and $5.2 billion, a fall of up to 14 per cent on the previous year, and more than $1 billion below analysts expectations.
There will also be consequences for the bank's executive team, who now face cuts to their bonuses.
"It's clear this result is well down on expectations and on our plan," Mr Thorburn said.
"As our bonus pool is based on cash earnings and return on equity then we can also expect and know that bonus pool will also be reduced."
But NAB will lift its final dividend two cents to 99 cents.
The latest provisions come on top of a long line of costs linked to its UK business, and the bank needed to do better, Mr Thorburn said.
Morningstar analyst David Ellis said it was smart for a new chief executive to take hits early in his tenure.
"You could look at it as a classic clear-the-decks strategy from a new CEO," he said.
The one-off charges include pre-tax provisions of STG670 million ($A1.22 billion) relating to Clydesdale Bank, which has been caught up in an industry-wide scandal relating to payment protection insurance and interest rate hedging products.
The division has been an albatross around NAB's neck for many years, especially in the wake of the global financial crisis, which hit Britain's banking sector hard.
Mr Ellis said NAB had been working hard for seven years to get the business into a position where it could be sold at a reasonable price.
Improvements in the UK economy and its banking industry meant NAB was getting closer to achieving that goal, he said.
"If the improvement in business conditions in the UK continues then I think NAB will be in a position to make a clean exit at a reasonable price, but there's still a lot of ifs and buts and uncertainty about when that will be."
NAB shares rose despite the news - although its rivals posted larger gains - adding 32 cents, or one per cent, to $32.47.
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