DUBLIN--Bank Of Ireland PLC (IRE), which is striving to emerge from the country's deep banking debt crisis, Friday posted a wider first-half loss and higher loan-loss charges, showing that the lender still has some way to go before returning to profitability.

The bank was among a group of six stricken Irish lenders that needed enormous amounts of government aid to keep them from collapse when Ireland's commercial property bubble disastrously burst over four years ago.

Weighed by Ireland's slow economic recovery and the wider euro-zone crisis, Bank of Ireland said it faced higher costs for customer deposits and wholesale funding in the latest period.

For the six months to end-June, Bank of Ireland reported an underlying operating loss of 907 million euros ($1.12 billion) after a EUR722 million loss a year earlier. The figure excludes items such as gains or losses arising on asset disposals.

It had a net attributable loss of EUR1.094 billion, after a year-earlier attributable loss of EUR508 million, and a total net loss of EUR1.10 billion in the period, compared with a loss of EUR507 million a year earlier.

Before the cost of the Irish government's bank guarantee scheme and allowing for certain accounting classifications, net interest income fell to EUR791 million from EUR966 million a year earlier, partly because of loan disposals.

And it said impairment charges on loans to customers rose to EUR941 million from EUR842 million a year earlier, mainly reflecting a sharply higher charge for home loans.

"Bank of Ireland has made further progress on the group's priorities against a challenging economic backdrop and interest rate environment that has impacted on the group's financial performance," said chief executive Richie Boucher. He said he expected impairment charges to reduce from their "elevated" levels, while its net interest margin--down to 1.20% from a margin of 1.33% a year earlier--should "start to strengthen from here."

Amid Ireland's banking debt crisis, the lender escaped outright nationalization but is still 15% owned by the government.

The huge costs incurred in saving the banking system eventually forced the government to strike a EUR67.5 billion bailout deal with the European Union and International Monetary Fund in late 2010.

The government is in discussions with the euro zone to somehow "retro-finance" a good part of its legacy bank-rescue costs. That deal may possibly involve taking out low-yielding so-called tracker home loans from some Irish banks' loan books.

Mr. Boucher told reporters the bank hadn't been involved in any such discussions.

-Write to Eamon Quinn at eamon.quinn@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires