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Clydesdale Bank chief apologises to customers

The chief executive of Clydesdale Bank has apologised after it was fined £8.9 million over mortgage failings.

David Thorburn said in a statement:

I am very sorry that this wasn't handled as it should have been. We should have made it clear at the time that this was entirely our fault and that some customers may be entitled to compensation.

In addition, an automatic compensation process for customers who underpaid as a result of our error is in place to provide immediate resolution for over 14,000 customer accounts.

Clydesdale has agreed to compensate those who were adversely affected, resulting in a total cost to the bank of about £42 million.

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Clydesdale mortgage shortfalls 'from £20 to £18,000'

The shortfalls in Clydesdale mortgages range from less than £20 to more than £18,000, with an average of £970, the City regulator found.

Clydesdale Bank has been fined £8.9 million by the City regulator. Credit: Reuters

Clydesdale, which is owned by National Australia Bank, sent letters to customers in 2009 which suggested they had no alternative but to bring their repayments up to date

However, many customers could have rejected demands to repay the shortfalls caused by Clydesdale's calculation errors.

Clydesdale Bank fined £8.9 million by regulator

Clydesdale Bank has been fined £8.9 million by the City regulator after it forced 22,000 customers into higher mortgage repayments in order to rectify a previous error by bank staff.

The Financial Conduct Authority has fined Clydesdale Bank £8.9 million over mortgage failings. Credit: PA Wire

The Financial Conduct Authority (FCA) said Clydesdale had failed to clearly spell out customers' rights following the bank's miscalculation on the repayments on more than 42,500 mortgages.

The earlier mistake meant a total shortfall of £21.2 million in Clydesdale mortgages, with customers who underpaid left with outstanding mortgage balances higher than they should have been.

Clydesdale and Yorkshire Bank cuts 'result of economic climate'

In the last half-year there has been a significant downgrade in the growth prospects of the UK economy, in part reflecting the drag on its recovery from heightened weakness in the eurozone. The action we are taking is needed to adapt to this current economic environment in the UK, and to reposition the UK banking business to improve returns for the group over the medium term. While every effort will be made to support our people, the substantive repositioning of the business will impact roles in the UK.

– Cameron Clyne, National Australia Bank chief executive