Commonwealth Bank shareholders have seen their dividend held steady for the first time in seven years as Australia's largest lender tries to insulate itself from global market turmoil.
CBA lifted its first half cash profit 3.92 per cent to a record $4.803 billion but left the interim dividend unchanged at $1.98 per security, keeping hold of some of the cash as a buffer against market volatility and a potential rise in bad debts.
"We're a financial institution and we're leveraged to the external environment; we can never assume the external environment won't effect us," chief executive Ian Narev told analysts on Wednesday.
"We could be sitting here in six months and the world might look a lot better, or it might not look as good.
"We need to be very long-term focused and, whether it's in profit growth or return on equity or dividend, never to try and get a positive surprise from the market on a particular result but to focus on what's best for the customers and shareholders over two, three, four, five years."
The market largely backed the move even though the increase in cash profit, the banks' preferred measure of profitability, was significantly lower than that of the supercharged growth since 2008's global financial crisis.
CBA shares opened up more than three per cent before paring some of those gains to close $1.33, or 1.8 per cent, higher at $74.20 against a backdrop of another steep fall for the benchmark S&P/ASX200.
The financial sector was weaker, with ANZ trading at levels not seen since mid-2012.
"In terms of their underlying profit ... they've retained some of it and that's a fairly prudent move in the current environment," CMC Markets analyst Michael McCarthy said.
"It will help in terms of credibility with investors."
CBA lifted the proportion of profit paid to shareholders one percentage point to 70.8 per cent as a result of last year's rights issue.
Chief financial officer David Craig said the bank remained on course for its full year payout ratio target of between 70 and 80 per cent.
The bank's assets are now 64 per cent deposit funded after customer deposits grew nine per cent, reducing the bank's reliance on wholesale funding.
The cash profit was slightly higher than analyst consensus of $4.77 billion, with net profit for the six months to December 31 up 1.83 per cent to $4.618 billion.
Home lending grew 6.5 per cent, contributing to a nine per cent increase in average interest-earning assets to $806 billion.
More than half of those assets, $430 billion, were home loan balances.
That was partially offset by a five basis point decline in net interest margin - the money the bank makes on its loans - which was hit by an increase in funding costs.
"This is an all-clear and that's all they had to deliver today," Mr McCarthy said.
CBA's LIFTS PROFIT BUT KEEPS DIVIDEND FLAT
* Cash profit up 3.92pct to $4.804bn
* Net profit up 1.83pct to $4.618bn
* Interim dividend unchanged at $1.98 per share fully franked
