The bank reported a profit of A$1.19 billion in the first half of the financial year, down 62% compared to the same period in 2019.

Westpac Group CEO Peter King said the bank had set aside A$2.24 billion in impairment charges, including A$1.6 billion to tackle the impact of the virus and A$900 million for a potential penalty from financial intelligence agency Austrac.

The regulator has accused Westpac of committing 23 million breaches of money laundering and counterterrorism rules in “serious and systemic” law-breaking involving more than A$11 billion.

“This is the most difficult result Westpac has seen in many years,” King said.

“It is significantly impacted by higher impairment charges due to Covid-19, as well as notable items including the Austrac provision.”

King said Australia was facing a “sharp economic contraction” in 2020 with a rebound not expected until the December quarter.

But he said the bank retained a strong balance sheet and ample liquidity.

It comes after ANZ Bank said its half-year after-tax profits had fallen 50% and NAB reported a 25% drop in profits.

Like ANZ, Westpac deferred a decision on interim shareholder dividend payments due to the ongoing economic uncertainty.

Westpac said it had also deferred more than 100,000 home loans and 30,000 business loans worth a total of A$47 billion, as part of a government programme to ease pressure on Australians during the country’s virus shutdown.