This included a £53m reduction in the fair value of certain treasury assets and a £139m impairment loss charge relating to certain treasury assets.
Due to the difficult market conditions, the lender also incurred a cost of £49m for strategic funding and liquidity holding costs in the first four months of 2008.
But A&L says that core operating profit excluding Treasury in Q1 was similar to the same period in 2007.
The bank says it has continued to extend its funding and now has pre-funded its medium term wholesale funding maturities, commercial paper and certificates of deposit into the second quarter of 2009.
A&L also revealed it has reduced its mortgage balances to £41.2bn, £1.5bn lower than at 31 December 2007.
Gross lending was £2bn lower than in the first four months of 2007 and now stands at £1.7bn.
Redemptions were £3.2bn, £800m higher than in the same period in 2007.
At the end of April, A&L says that 2,650 of its 462,270 mortgage accounts were over three months in arrears, an increase of around 300 in the first four months of the year.
It says that these accounts represent only 0.57 per cent of its total mortgage accounts, significantly better than the industry average of 1.34 per cent.
Group chief executive David Bennett says: “Alliance & Leicester has made good progress during the first four months of 2008. Core operating profit excluding Treasury was similar to the same period in 2007, although volatility in the financial markets has led to a further reduction in the value of certain treasury assets.”