SYDNEY, AAP – Commonwealth Bank of Australia is looking forward to a strong year in fiscal 2022 as the economy gathers pace, after posting a more than 20 per cent jump in first-half profit.

Net cash earnings, the bank’s preferred measure of profitability, rose 23 per cent to $4.7 billion, in line with its statutory net profit which grew by 26 per cent from the same period last year.

CBA increased its interim dividend for shareholders to $1.75, up 25 per cent from the fiscal 2021 first half.

It also plans to buy back $2 billion worth of its shares trading on the Australian Securities Exchange, on market, giving investors another boost.

This comes after CBA bought back $6 billion worth of stock in fiscal 2021.

CBA’s solid first half result comes despite lower lending margins due to relatively low borrowing rates for its customers.

The earnings boost came from reduced remediation costs related to the banking royal commission findings released some years ago as well as lower expenses for bad loans.

“We expect the Australian economy to have a strong year in 2022, despite early challenges from the Omicron strain of COVID-19,” CBA said on Wednesday.

“Australian households have accumulated savings and stronger wage growth is expected.”

The bank said while the risk of price inflation in Australia is low compared to the country’s global peers, its economists are still forecasting interest rates to rise in August, for the first time in years.

“We are well-positioned to support business investment to build Australia’s future economy.”