News: IFL UPDATE 1-Australia's Westpac expects first-half profit reduced by $218.4 mln

(Adds breakup of items affecting profit, background)

April 26 (Reuters) - Westpac Banking Corp (WBC) said on Monday it expects first-half cash earnings to be A$282 million ($218.38 million) lower due to additional provisions for customer remediation, write-downs as well as costs and losses associated with recent deals.

Australia's second-largest bank is set to report its first-half results on May 3.

Around A$220 million is being set aside for customer remediation, A$113 million as an accounting loss on the sale of its pacific business, A$56 million as costs to end its relationship with IOOF Holdings (IFL) and around A$200 million more toward write-downs.

However, a A$288 million net gain on the bank's investment in cryptocurrency exchange Coinbase Global COIN.O , which recently listed in the United States, and a stake sale in buy-now-pay-later firm Zip Co Ltd (Z1P) offset the half's profit hit.

Last year, Westpac had taken large write-downs, mainly to account for expected loan losses from the COVID-19 crisis, and posted cash earnings of A$993 million. The bank also opted to not pay an interim dividend.

Westpac has said it hopes to return to paying "consistent" dividends going forward.

Westpac shares have surged 30% this year, outperforming Australia's other three major banks, as it sells non-core assets and looks to turn the page on the reputational hit it took for enabling millions of illicit payments, including to people exploiting children, that resulted in a record A$1.3 billion fine.

($1 = 1.2913 Australian dollars)