National Australia Bank has sacked staff involved in a UK scandal over the mis-selling of income protection products that resulted in a record STG20.7 million ($A40.12 million) fine.
Britain's Financial Conduct Authority slapped NAB's Clydesdale bank with the fine after finding "serious failings" in its handling of complaints from customers who were mis-sold Payment Protection Insurance (PPI).
The watchdog also found Clydesdale had also misled the Financial Ombudsman by providing false information about the evidence it held about the mis-selling.
The fine is the largest imposed by the FCA for failings relating to PPI products, which were designed to ensure people could still meet their loan and credit card repayments if they lost their jobs or became disabled.
NAB chief executive Andrew Thorburn said several staff have since been sacked, and managers denied bonuses.
"In the case of a few individuals, they have been removed from their jobs," Mr Thorburn told The Australian newspaper.
"But it also went further because management were accountable, even if they weren't responsible. Some incentive outcomes were zero."
Since taking the top job at NAB in August 2014, Mr Thorburn has stepped up the bank's efforts to cast off its UK operations, which have long been a drag on the company's performance.
A range of options, including a sale through public markets, are being considered.
The FCA found that about 93,000 Clydesdale customers could be entitled to refunds or extra compensation.
"Clydesdale's failings were unacceptable and fell well below the standard the FCA expects," the FCA's acting director of enforcement and market oversight Georgina Philippou said.
"The fact that Clydesdale misled the Financial Ombudsman by providing false information about the information it held is particularly serious and this is reflected in the size of the fine."
The FCA found that Clydesdale and sister bank Yorkshire failed to search for documents if they fell outside a seven-year timeframe, even if they were still readily available.
And it said Clydesdale had provided false information to the Financial Ombudsman Service in response to requests for evidence of the records held on PPI policies.
Millions of customers were mis-sold PPI products by various UK banks and financial institutions, some as far back as the 1990s, sparking a massive investigation by regulators.
NAB recently increased its provision to cover PPI complaints in the UK by STG420 million ($A814.03 million) in anticipation of higher redress costs.
It said in October that total provisions for PPI redress were STG806 million ($A1.56 billion), with STG291 million ($A564.01 million) having been utilised.
The full cost will not be known until the review of past cases has been completed.
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