CBA flags concerns despite $9.4bn profit

Commonwealth Bank of Australia chief executive Ian Narev has cited weak wages growth and political uncertainty as threats to Australia's economy, even as the country's biggest bank unveiled a seventh straight record profit of $9.45 billion.

Cash profit for the 12 months to June 30 was up 3.4 per cent on the previous year but Mr Narev said that slow economic growth remained a concern.

Statutory profit was up 1.8 per cent at $9.23 billion, while its loan impairment expense jumped 27 per cent from a year ago to $1.26 billion, largely due to exposures to the resources, commodity and dairy sectors.

"Continuing demand for Australian resources, a vibrant construction sector in NSW and Victoria, and employment growth in key services sectors have underpinned real GDP (gross domestic product) growth and employment stability," Mr Narev said.

"However, on-going economic strength will require a lift in the low rates of nominal growth."

Net interest margin dropped slightly, from 2.09 per cent to 2.07 per cent, while the bank lifted its customer deposits by eight per cent to cover 66 per cent of group funding.

The bank raised rates for some savers last week in the hope of attracting more deposits.

At the same time, it responded to the Reserve Bank's 0.25 per cent cut in the cash rate by reducing its owner-occupier standard variable mortgage rate by 0.13 percentage points from August 19.

"Income growth inside and outside Australia remains weak, so people are not feeling better off," Mr Narev said.

"When combined with on-going global economic and political uncertainty this makes households and businesses cautious, and hesitant to respond to monetary stimulus."

The bank will pay an unchanged fully franked final dividend of $2.22 per share, taking the full-year distribution to $4.20, flat on the previous year.