The loss compares with a 107m profit in the first quarter of last year.
The credit impairment charge for the first four months of 2008 rose to 36m compared with 23m in the whole of 2007 and includes a 15m charge for mortgage fraud.
The firm says the increase is due to the recent worsening of economic conditions which have led to house price deflation and an increase in accounts three months or more in arrears to 2.16 per cent from 1.63 per cent at the end of 2007.
The board warns that the tough environment will continue to push arrears higher but says stricter lending criteria mean the overall increase should not be as steep as in the first four months.
Executive chairman Rod Kent says: “This is a disappointing trading update reflecting a more difficult market.”