The Unfair Terms In The Consumer Contracts Regulations 1999 say penalty charges must reflect administration costs.
Banks cannot make a profit from your being overdrawn.
These charges are not only confined to exceeding overdraft limits; they can include, amongst other things, returned cheques, unpaid direct debits/standing orders.
You can only claim up to a maximum of six years' worth of charges.
It is wise to prepare any Unfair Bank Charge Claims as soon as possible in order to Reclaim what is rightfully yours.