The deeper loss resulted from an increase in provisions against soured loans, which rose 12 per cent year on year to €941m because of a deterioration in its residential mortgage portfolio.
Amid weak economic conditions and high unemployment, residential property prices are still falling in Ireland and dropped to 50% below their national peak in June.
“The management of our Irish mortgage book remains a critical priority,” the bank said in its results statement.
It added: “The vast majority of our customers continue to meet their mortgage repayments in full. However, the difficult economic environment has meant that a significant number of customers have encountered changed circumstances which have negatively impacted on their income.”
The number of formally restructured mortgage accounts overall have risen to 15,861 worth €2.5bn at 30 June 2012, up around 40% by volume and value in six month.
Of these restructures, 56% were moved on to temporary interest-only to lower monthly repayments, 30% to reduced payments and 12% agreed to extend their mortgage terms.
Bank of Ireland withdrew from the intermediary market in 2009 and was the only Irish-owned bank to escape state control following the banking crisis.
In July 2011, it attracted private investment from several North American investors and is continues to shrink its balance sheet and cut costs.
