News: WBC UPDATE 1-Australia's Westpac braces for $1.4 bln hit to earnings on coronavirus impact

(Adds background, details about impairment provision)

April 28 (Reuters) - Australia's Westpac Banking Corp (WBC) on Tuesday said it expects to record pre-tax impairment provisions of A$2.24 billion ($1.4 billion) for the first-half, largely due to the economic deterioration expected from the coronavirus outbreak.

About A$1.6 billion of the impairment charges are predominantly related to COVID-19 impacts, the country's second-largest lender said, while the remaining A$600 million relate to certain other individual provisions and net write-offs.

The impairments are in addition to provisions of A$1.43 billion after tax the lender announced earlier this month, mostly for an expected fine over accusations it enabled millions of illegal payments including between known child sex offenders.

After Westpac's disclosure, two of the country's "Big Four" lenders have now detailed a hit to upcoming earnings, with No. 3 lender National Australia Bank (NAB) making an A$1.22 billion provision in late-April.

Australian banks, already counting the cost of years of financial misconduct through fines and refunds, are now bracing for an expected surge in bad debts as customers seek loan and payment deferrals due to the economic downturn triggered by virus containment measures.

The virus-related impairments were based on a number of assumptions, Westpac said, such as lower expected economic growth, higher unemployment and an expected fall in both residential and commercial property prices.

It also includes an assessment of additional stress that could emerge in various industries as a result of the outbreak, Westpac said.

"While impairment provisions have begun to increase, the extent of additional charges in subsequent periods will depend on the severity and duration of the decline in economic activity and the size and effectiveness of stimulus measures," it said.

Westpac is set to announce results for the six months ending March 31 and its decision on an interim dividend payment on May 4.

($1 = 1.5513 Australian dollars)