(Rewrites with details of gains on Coinbase, Zip exposure)
April 26 (Reuters) - Westpac Banking Corp WBC.AX said on Monday one-off gains from its exposure to a U.S. cryptocurrency exchange and a buy-now-pay-later firm failed to offset a hit to first-half cash earnings from customer refunds and write-downs.
Australia's second-largest bank is set to report its first-half results on May 3, with earnings slated to be A$282 million ($218.38 million) lower.
Westpac, through its venture capital arm Reinventure, booked a net A$288 million gain on its investment in Coinbase Global COIN.O , which recently listed in the United States just as cryptocurrencies are slowly gaining greater mainstream acceptance. the listing on April 14, Westpac has slashed its exposure to Coinbase by 50%. It had 1.2 million shares of the exchange.
The lender also gained A$18 million from selling its stake in Zip Co Ltd Z1P.AX , Australia's No.2 buy-now-pay-later firm.
The windfalls, however, were not enough to offset around A$220 million in additional provisions for customer refunds, payments and litigation.
A loss of A$113 million from the sale of its pacific business, software and goodwill write-downs of roughly A$200 million and A$56 million from costs to end its relationship with IOOF Holdings IFL.AX will also weigh on the lender's profit.
Westpac posted interim cash earnings of A$993 million last year after taking large write-downs, mainly to account for expected loan losses from the COVID-19 crisis, while also opting to not pay a dividend. lender has been selling non-core assets and looking 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.
Shares of Westpac rose half a percent amid wider gains in the market .AXJO . They have surged 30% this year, outperforming Australia's other three major banks.
($1 = 1.2913 Australian dollars)