"In the first three months of this year we have delivered strong financial performance with increased underlying profit, a significant improvement in statutory profit and returns"
The results include an additional £350 million PPI provision to reflect a revised FCA policy statement relating to the Plevin cases, which includes a requirement to proactively contact customers who have previously had their complaints defended, and which is likely to increase estimated volumes and redress.
Other conduct provisions of £200 million include the £100 million estimated compensation costs for economic losses, distress and inconvenience caused to the victims of the HBOS Reading fraud and £100 million for Retail conduct matters.
Lloyds' open book mortgage balances continued to decline in the first quarter, however it expects balances to stabilise and then grow to close the year in line with the position at 31 December 2016.
The Group’s underlying profit in the quarter was £2,083 million, 1% higher than the first quarter of 2016.
António Horta-Osório, Group Chief Executive, commented: "In the first three months of this year we have delivered strong financial performance with increased underlying profit, a significant improvement in statutory profit and returns, and strong capital generation. These results continue to demonstrate the strength of our customer focused, simple and low risk business model and our ability to respond to a challenging operating environment.
"The UK economy continues to benefit from low unemployment and reduced levels of indebtedness, and asset quality remains strong and is stable across the portfolio. We remain committed to supporting the people, businesses and communities in the UK through our Helping Britain Prosper Plan and putting customers first. As announced earlier this month, we are determined that the victims of HBOS Reading are fairly, swiftly and appropriately compensated and we have set aside a provision of £100 million in our first quarter results.
"We continue to make good progress against our strategic priorities of creating the best customer experience; becoming simpler and more efficient; and delivering sustainable growth; and we remain on track to deliver the Group financial targets for 2017, whilst maintaining our longer term guidance."
