CYBG's shares closed down nearly 17 percent after the bank formerly owned by National Australia Bank said it would take another 150 million pound ($193 million) charge related to the mis-selling of payment protection insurance (PPI) policies.

The PPI mis-selling scandal has collectively cost British banks at least 34 billion pounds in compensation and fines.

The owner of Clydesdale Bank and Yorkshire Bank, which became Britain's sixth largest bank following its purchase of rival Virgin Money, also said the short-term prospects for homeowners and small businesses, its main businesses, were subdued due to uncertainty over Britain's EU departure.

"We took a position in 2016 that Brexit would lead to lower economic growth environment. I think you are seeing some of that. We are seeing inertia in SMEs and their investment profiles," Chief Executive David Duffy said on a media call.

There was also disappointment over the bank's failure to update investors on an ongoing review of Virgin Money's credit card book, which CYBG believes is overvalued and is expected to result in a further writedown in the coming months.

"Investors are looking at the deal with Virgin Money and saying the benefits are long-dated, meanwhile the near-term outlook is weak and PPI is a concern," John Cronin, analyst at Dublin-based broker Goodbody said.

CYBG reported a statutory loss before tax of 164 million pounds ($211 million) for the year ended Sept. 30, including an overall 352 million pound charge related to the mis-selling of payment protection insurance (PPI).

The bank's chief financial officer Ian Smith said he hoped it had put PPI behind it with a "positive trend" in complaint numbers, but added: "You never know".

He said CYBG would look to address the valuation of Virgin Money's credit card book "probably in January next year".

CYBG forecast its net interest margin - the difference between what banks earn from loans and pay for deposits - would fall to 160-170 basis points (bps) in its new financial year from 178 bps in the one just ended.

(Additional reporting by Muvija M in Bengaluru and Lawrence White in London; Editing by Bernard Orr/Mark Potter/Alexander Smith)

By Noor Zainab Hussain and Iain Withers