Commonwealth Bank of Australia (CBA) reported a statutory profit of $9.5 billion for the 2023/24 financial year, marking a 6% decrease from the previous year.

Despite the profit decline, the Australian economy remains resilient, bolstered by low unemployment and consistent investment.

The bank's annual cash profit also saw a 3% decline, attributed to rising costs and intense competition in the banking sector.

This decline in profit is linked to flat operating income, a 4% rise in expenses, and a decrease in loan impairment expenses.

CBA maintains strong loan loss provision coverage and has surplus capital, along with conservative funding metrics, which positions it favorably.

As of June, home loan payments overdue by 90 days or more rose to 0.65% of total mortgages, reflecting increasing financial strain on borrowers.

The rise in home loan arrears is closely linked to the increasing cost of living and higher interest rates affecting many Australians.

Investors are concerned that rising deposit payouts and bad loans may overshadow gains in mortgage revenue.

CBA declared a fully franked dividend of $2.50 per share, raising the total full-year dividend to $4.65 per share, which is a 3% increase from last year.

Australia's central bank has maintained interest rates at 4.35% since November, with markets anticipating potential easing by year-end.

CBA's share price has surged by one-third since late 2023, raising questions about the sustainability of this increase amid a broader banking sector rally.

CBA's lending growth likely improved in the second half of the year, aligning with the broader housing loan market.