Lloyds says the improvement was down to a significant slowing of impairments in its wholesale business.
The bank says it is on track to deliver £2bn of efficiency savings in the group by 2011.
The bank says that customer deposit balances have grown while lending has remained flat.
It says: “The group is pleased to have returned to profitability, on a combined businesses basis, in the first quarter.
“Based on the group’s current economic and regulatory assumptions we expect this trend to continue and for the group to deliver a combined businesses profit at both the half and full year.”
Lloyds says there have been improvements in wholesale funding since the beginning of 2010 and says it has a substantial portfolio of liquid assets.