Lloyds Banking Group has reported underlying profit in the first quarter of 2017 of £2.08bn, 1% higher than the first quarter of 2016.
It also saw higher total income, a further reduction in operating costs and lower impairment charges.
Statutory profit before tax increased to £1.3bn, while statutory profit after tax was £890m.
Restructuring costs were £157m and comprised severance costs relating to the Simplification programme, the announced rationalisation of the non-branch property portfolio and the work on implementing the ring-fencing requirements.
As previously announced to the market, the results include an additional £350 million PPI provision following the release of the revised policy statement by the FCA on 2 March 2017. The additional provision has been taken to reflect the estimated impact of the policy statement including the revised arrangements for 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.
António Horta-Osório, group chief executive, said: “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.”