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* Fines, misconduct have cost British banks $60 million
* Banks have received 20.8 million complaints since 2008
* Fivefold increase in cases going to ombudsman
By Matt Scuffham
LONDON, Nov 25 (Reuters) - Bad behaviour that has costBritish banks 38.5 billion pounds ($60 billion) in fines andcompensation over the past 15 years will take a generation tofix, an independent think tank said on Tuesday.
Britain's banks have been hit by scandals ranging from theattempted manipulation of foreign exchange and benchmarkinterest rates to the mis-selling of loan insurance and complexinterest-rate hedging products.
A report into the culture of British retail banking by thinktank New City Agenda and Cass Business School said that anaggressive sales culture took hold over two decades, with somebranch staff receiving cash bonuses, iPods or even tickets tothe Wimbledon tennis tournament for hitting sales targets.
"A toxic culture which was decades in the making will take ageneration to turn around," said Conservative lawmaker DavidDavis, chairman of New City Agenda. "At this critical juncture,Britain's biggest banks cannot afford to let the bettertreatment of customers become a second-order priority."
The report said the mis-selling of payment protectioninsurance (PPI) alone cost banks at least 27 billion pounds inBritain's costliest consumer scandal. The high-margin productswere meant to cover repayments if customers fell ill or were outof work but were often sold to people who did not need them orwould be ineligible to claim.
CUSTOMER COMPLAINTS
The biggest sum set aside by a bank for PPI compensation isthe 11.3 billion pounds at Lloyds Banking Group,followed by Barclays (5 billion pounds), RBS (3.3billion pounds) and HSBC (2.5 billion pounds).
New City Agenda noted that banks had received 20.8 millioncomplaints since the 2007/09 financial crisis, during which timethere was a fivefold increase in cases going to the financialombudsman, which settles disputes when banks and customers failto reach agreement.
It recommended that the new Banking Standards Review Councilshould talk to branch staff to check they are not under pressureto sell and should report annually to parliament's TreasuryCommittee, which oversees the work of the finance ministry.
"The need for culture change has been recognised, but it hasto be transmitted all the way from the top to the bottom ofthese huge organisations," said John McFall, a director of NewCity Agenda and former Treasury Committee chairman.(1 US dollar = 0.6383 British pound) (Editing by David Goodman)
