Parent group National Australia Bank (NAB) said in a trading update that its UK arm, which also includes Yorkshire Bank, had seen better quarterly cash earnings in the first three months of its financial year.
Part of that improvement in the period between October and December was attributed to the reduction in costs, as well as a lower charge for bad and doubtful debts.
Clydesdale has gone through a major turnaround programme since 2012, which saw 1400 people leave the business.
Customer redress costs were said to be "negligible" in the quarter but NAB said "there remains a wide range of uncertain factors relevant to determining the total costs associated with conduct related matters".
The areas the bank is concerned about include payment protection insurance (PPI) and some complex business loans.
NAB said: "Regulators continue to take an active stance in our management of customer claims, including for payment protection insurance and interest rate hedging products.
"There has also been an increase in the level of complaints and settlements relating to some tailored business loans.
"Accordingly, the risk that additional provisions will be required for UK conduct-related matters has increased since the 2013 full year results."
No figure was given in relation to the potential size of the additional provisions. NAB said it would be in a position to give a more certain outlook when its half-year accounts are published later this year.
In October last year, the bank said it had already set aside £386 million for PPI and paid out £234m.
In September, it was fined £8.9m for mortgage errors, with the potential bill for that expected to be £42m.
Yesterday, David Thorburn, chief executive of Clydesdale and Yorkshire Banks, said he was encouraged by the progress the bank was making but admitted there was still much work to be done.
He said: "Underlining our commitment to dealing with past conduct issues and learning from our mistakes, we created a new, dedicated Customer Trust and Confidence function in January.
"The team will drive a wide- ranging programme of change to embed the culture and processes that will ensure all our products and services deliver fairness for customers now and in the future.
"More broadly, we're looking at all aspects of the service, support and value we provide our customers."
The new customer trust unit is based in Glasgow and made up of a number of senior individuals in the business who are understood to be spending time making sure customers are fairly treated across all of Clydesdale's activity.
Mr Thorburn said contactless payment technology was being rolled out for debit card customers later this year, along with improved mobile payment services.
He said: "Over the course of the year ahead, we'll also look at further enhancements to our current account products to ensure we continue to deliver better value for customers." The transfers of UK commercial real estate assets from Clydesdale to NAB's balance sheet also improved cash earnings in the quarter.
NAB said the better performance was a result of fewer top-ups being needed for existing impaired lending and a slowing on the emergence of new impaired loans.
Overall, NAB said its quarterly cash earnings were up 7% to A$1.55 billion (£800m), with unaudited net profit at A$1.4bn (£750m). Earnings were up by 1%, while bad and doubtful debt charges dropped 23% to A$324m (£175m).
NAB chief Cameron Clyne said: "Particularly pleasing was the further improvement in the performance of UK Banking and the NAB UK Commercial Real Estate run-off portfolio. Both continue to benefit from the restructure we undertook in 2012 and the recovery of the UK economy."