Lloyds Banking Group PLC (LON:LLOY) said first quarter profits dropped 46% as market volatility and other issues took their toll.
The state-backed bank said statutory pre-tax profits were £654mln against £1.2bn a year ago due partly to the £790m impact of redeeming a tranche of investor bonds known as "enhanced capital notes".
Market and insurance volatility during the period and asset sales also had an effect, as well as restructuring costs.
Underlying profit fell 6% to £2.05bn versus the prior year, but was in line with last year after excluding a £660mln charge for selling TSB and £85mln of TSB dual running costs.
Lower operating costs and reduced impairment charges offset a small reduction in income.
The impairment charge was £149mln, 6% lower than in the first quarter of 2015.
There was a charge of £115mln in the first three months to cover "retail conduct matters".
No further provision was taken for payment protection insurance (PPI), where complaint levels over the three months were about 8,500 per week on average, broadly matching expectations.
Chief executive António Horta-Osório said: "In the first three months of this year we have continued to make good progress, delivering a robust financial performance and maintaining our strong balance sheet.
"We continue to support and benefit from a resilient UK economy and remain focused on delivering on our targets."