Westpac has flagged a $1.43 billion hit to its first-half profits as the banking giant puts aside provisions for the money laundering compliance scandal and customer refunds, and has warned of significant loan losses due to the coronavirus.

The big four bank said it expects to update the market on these COVID-19-related costs before its half-year results on May 4, where it said profits would be lower than last year.

As investors mull the potential for deep dividend cuts and capital raisings by banks, the provisions will take Westpac's common equity tier 1 capital ratio — a key gauge of bank strength — to 10.5 per cent of risk-weighted assets.

Westpac said it expects other new and increased provisions and asset write-downs totalling around $1.43 billion after tax for the first half. Credit:Darrian Traynor

In ordinary times this would be the minimum "unquestionably strong" level required by regulators. But the Australian Prudential Regulation Authority has temporarily relaxed its bank capital requirements, to give lenders greater scope to support customers during the sharp economic shock triggered by the virus outbreak.