The Australian Federal Court ordered Westpac Banking (ASX:WBC, NZE:WBC) to pay AU$26 million in civil penalties after failing to respond to over 200 online hardship requests within the time required by law over 2017 to 2023, the Australian Securities and Investments Commission said in a statement on Wednesday.

The requests were from customers of Westpac and its St George Bank, Bank SA, and Bank of Melbourne subsidiaries who were struggling to meet repayments on products including home loans, credit cards, personal loans and car loans, the regulator said.

The company made admissions of contravention during the proceedings and compensated affected customers with over AU$1.7 million in remediation costs, the regulator said.

In an emailed statement to MT Newswires, a Westpac spokesperson said the company self-reported the issues in 2022 and 2023 and completed a remediation program, including refunds of fees and charges, debt waivers and payments for non-financial loss. The bank received roughly 695,000 requests for hardship assistance over the period.

"Westpac acknowledges the Court's decision. We again apologise to any customers who were affected. We are deeply sorry we let them down," the spokesperson said.

The bank's Australian shares were down 2% in recent Wednesday trade, while its New Zealand shares shed about 3%.