(Adds details on loan provisions by peers, results, unit stake...

(Adds details on loan provisions by peers, results, unit stake sale)

May 13 (Reuters) - Commonwealth Bank of Australia (CBA) kept aside A$1.5 billion ($971.25 million) on Wednesday to cover expected loan losses caused by the COVID-19 pandemic and posted a 23.5% drop in third-quarter cash profit.

Australia's banks are facing a new reality of record-low interest rates, rising unemployment and what is likely to be the country's first recession in three decades as the fallout of the health crisis takes a toll on the global economy.

CBA, which follows a different reporting calendar to its peers, said its troublesome and impaired assets stood at A$8.1 billion at the end of March, higher than the A$7.8 billion it had on its books three months ago.

Wednesday's coronavirus-related provision brings CBA's total credit provision to A$6.4 billion.

"Given an unprecedented set of circumstances which are still unfolding and evolving, a definitive assessment of the longer term outcomes of the COVID-19 pandemic and the consequent economic and societal impacts is difficult at this stage," the bank said.

In a separate release, CBA said it was selling a 55% stake in its pension arm Colonial First State to private equity giant KKR & Co KKR.N for about A$1.7 billion.

The stake sale would add 30 to 40 basis points to its common equity tier 1, which fell to 10.7% as of March 31, Australia's biggest bank said.

Cash profit from continuing operations fell to A$1.3 billion for the three months ended March from A$1.70 billion a year earlier.

In the last fortnight, three of the so-called 'Big Four' banks have more than quadrupled their bad debt charges as Australia's economy faces its biggest contraction since the Great Depression.

The three - Westpac Banking Corp (WBC) , National Australia Bank (NAB) , and Australia and New Zealand Banking Group (ANZ) - reported a near two-thirds drop in their combined profits during the first half due to the charges, totaling around A$5 billion. ($1 = 1.5444 Australian dollars)