Australia’s largest lender, Commonwealth Bank of Australia, reported a record annual profit due to rising interest rates and increased living costs.

The bank set aside $A1.47 billion more in provisions due to ongoing cost of living pressures and rising interest rates.

Cash earnings for the year ended June 30 grew 6% to A$10.16 billion, slightly above analyst expectations.

Loan repayments exceeding 90 days late grew slightly since December but remained below long-term norms.

CBA’s net interest margin has dropped from a December peak and expects pressure to continue into 2024.

CBA announced a final dividend of a $2.40 per share and a stock buyback of A$1 billion to sweeten the results release.