Lloyds Banking Group is cutting £2 million from bonuses paid to 13 executives, including former chief executive Eric Daniels.
Mr Daniels will lose £580,000 from his original £1.45 million bonus.
Bonuses for another four directors will be cut by £190,000 while a further eight executives will receive about £100,000 less.
The executives are being penalised for the bank's mis-selling of payment protection insurance.
The chairman of the Financial Services Club, Chris Skinner, says Lloyds is the first bank to use new regulations allowing it to take back bonuses, and he expects other banks follow its lead.