(Reuters) – Westpac Banking Corp WBC.AX said on Monday it expects to take a A$1.22 billion ($870.4 million) hit to cash earnings in the second half due to write-downs and provisions, including an additional amount set aside for a record fine.
Australia’s second-largest bank reached a A$1.3 billion settlement with Australia’s financial crime agency in September for allowing illicit payments, which the lender set a further A$415 million aside for.
Around A$568 million of goodwill will be written off at Westpac Life Insurance Services and Westpac’s Auto Finance business.
And a further A$182 million will top up its customer remediation provision, Westpac said.
The bank said it would see a A$26 million pre-tax gain on the sale of its stake in Zip Co Ltd Z1P.AX in the first half of fiscal 2021.
In total, these charges and provisions will reduce the bank’s common equity tier 1 ratio by 24 basis points, it said.
Westpac will report full-year results on Nov. 2.
Last week, National Australia Bank NAB.AX said it expects to take a A$264 million hit to its second-half cash earnings.
Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Alison Williams and Andrew Heavens