Lloyds Banking Group has announced a first quarter loss, after making a £3.2bn provision for potential mis-selling claims by customers who took out payment protection insurance (PPI).
In April, UK banks lost a judicial review over PPI compensation.
Lloyds reported a loss of £3.47bn for the first three months of the year. It made a £721m profit a year ago.
It also took a charge of £1.1bn to allow for further falls in commercial property prices in the Irish Republic.
However, the bank’s core business showed growth as customer loans and deposits rose from £842bn to £847.8bn.
“The bank as a whole appears to be getting better and appears to be taking a larger market share,” said Ralph Silva, banking analyst at SRN.
Before the provision for PPI compensation and other one-off items, the bank said it had made a profit in the quarter of £284m.
The results were the first presented by new Lloyds chief Antonio Horta-Osorio, who replaced Eric Daniels on 1 March.
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PPI costs push Lloyds into loss