CBA dividend jumps on $2.7bn profit

The Commonwealth Bank has delivered a record final dividend payout to its shareholders of $1.3 billion and forecast higher earnings in the next two years. The full-year dividend rose 19 per cent to $1.83 cents a share, underpinned by a 4.5 per cent increase in net profit to $2.7 billion for the year to June 30.

CEO David Murray said the bank's performance was strong and the effect of the housing market slowdown minimal. However he conceded that the share funds in CBA's wealth management arm were underperforming, recording net outflows of $4 billion in the year.

The bank's net interest income totalled $5.4 billion, up 8 per cent. Non-interest income rose 8 per cent to $2.85 billion. Home loan balances increased to $105 billion, up 20 per cent. But net interest margins fell slightly to 2.53 per cent. Murray said the CBA is targeting annual cash earnings per share growth of over 10 per cent in the three years to June 30, 2006 as well as compound annual productivity improvements of 4-6 per cent.