CLYDESDALE Bank is planning to set aside at least another £245 million to meet customer redress claims and warned further charges are likely.
The latest sum brings the total of Clydesdale's provisions to deal with mis-selling to more than £811m.
Yesterday Clydesdale's owner National Australia Bank also warned a Yes vote for Scottish independence would lead to significant cost increases for its UK business.
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Speaking as NAB unveiled third quarter results, chief executive Andrew Thorburn, who took charge earlier this month, warned UK operations were still facing several challenges.
He said: "Conduct charges are difficult to predict, but we now expect that we will need to take further provisions at the full year result for both interest rate hedging products and Payment Protection Insurance (PPI).
"In addition, the Scottish Independence vote takes place on 18 September and a vote in favour of independence may give rise to significant additional costs and risks for Clydesdale Bank.
"We continue to closely monitor the situation and have appropriate contingency planning in place."
NAB said its UK operations, which also include Yorkshire Bank, are going to have to book at least £75m in relation to the costs of administering claims for payment protection insurance (PPI) mis-selling, taking the total set aside to £461m.
On top of that NAB said "significant additional provisions" are likely to be required as a result of several new developments.
Those measures include a revamped complaint handling process which is anticipated to lead to increased payments for new complaints and previously closed complaints as well as a need to re-examine customer records from before the year 2000.
Clydesdale is also experiencing a higher than anticipated level of new complaints and remains in talks with the Financial Conduct Authority in relation to its previous complaints handling processes.
NAB said: "The ability to reliably estimate the impact of these developments remains uncertain."
David Thorburn, Clydesdale's Glasgow-based chief executive, said: "The way we've handled historic PPI complaints has not been consistent, and we are committed to putting this right.
"We have already introduced a new PPI complaint handing process, and we will also apply this new process to a systematic and proactive review of all past PPI complaints."
Along with PPI, Clydesdale is setting aside some £170m for customer redress for those who were mis-sold complex interest rate hedging loan products. The total put aside for that is now £350.5m.
NAB signalled it was hard to accurately gauge how much more provisions it may have to take but it will provide an update when it announces full-year results later in 2014.
It said: "There remains a wide range of uncertain factors relevant to determining the total costs associated with conduct related matters."
In the quarter to the end of June the UK cash earnings were said to be lower.
There was strong growth in mortgage lending and a lower charge for bad debts.
David Thorburn felt there were a number of positives for Clydesdale in the period and said: "We have seen continued strong growth, well ahead of system, in our residential mortgage lending and deposit balances, and charges for bad and doubtful debts are down."
The non-core UK commercial real estate portfolio on NAB's balance sheet dipped in value over the quarter from £3.3 billion to £3bn although £625m of impaired loans have since been offloaded to private equity firm Cerberus Global Investors.
Andrew Thorburn, who said he was proud to get the opportunity to be NAB group chief executive, said: "This was a pleasing result, and as we have previously said we will continue to look at opportunities to optimise return on equity by accelerating the sale of non-core assets."
NAB said its total net profit in the quarter came in at A$1.7bn with Australian banking flat, New Zealand posting an increase and its wealth arm also up.
Group bad debts were down nine per cent to A$241 million mainly as a result of lower charges in the UK and Australia.