(Adds details on deferrals, impairment charge) Aug 18 (Reuters)...

(Adds details on deferrals, impairment charge)

Aug 18 (Reuters) - Westpac Banking Corp (WBC) on Tuesday scrapped its interim dividend citing ongoing uncertainty caused by the coronavirus crisis, but said around half of the mortgage deferral customers it had contacted were expected to restart regular payments.

Australian banks have been grappling with record-low interest rates, higher default risk and loan holidays for struggling borrowers, as the country faces its first recession in nearly three decades.

The lender took an impairment charge of A$826 million ($595.71 million) during the quarter to increase provisions to cover for bad debts, which represented about 46 basis points of gross loans on an annualised basis.

Westpac also said it had contacted 85% of its mortgage loan customers on deferral plans, and around 50% of them are expected to resume regular payments.

Westpac said 78,000 mortgage deferral packages were active as at July 31, which was lower than the total of 135,000 relief packages provided under the deferral scheme.

Excluding one-time items, it reported third-quarter cash earnings of A$1.32 billion ($952.25 million), which was higher than the first-half average, mostly due to lower impairment charges, the Sydney-based lender said.

Westpac also said it would not pay an interim dividend, having postponed the decision on the first-half payout in May due to unclear outlook.

($1 = 1.3866 Australian dollars)