COMMONWEALTH Bank (ASX:CBA) has delivered a 4 per cent lift in first-half profit to $4.8 billion, bolstered by strong operating growth in retail services.

Operating income increased 6 per cent to $12.36 billion in the six months ending December 31, driven by solid volume growth and revenue momentum across the business.

The retail division was up 8 per cent to $2.2 billion, compared to the previous year.

Commonwealth Bank CEO Ian Narev attributed the volume growth to customer satisfaction and says the group will continue to invest in the area to remain competitive.

"Operating income grew 6 per cent during this period, with all businesses contributing," Narev says.

"This consistency of income, combined with our focus on long-term productivity, sustains our commitment to keep investing in our customer-focused strategy."

There was a 6.1 per cent increase in expenses based on inflation, foreign exchange movements and ongoing investment spend. Investment spend increased 14 per cent, with the majority directed towards productivity and growth initiatives.

Narev says strong uptake of digital and mobile services in the first half demonstrates the importance of consistent innovation.

Tap & Pay card numbers have more than doubled on the prior half, while Cardless Cash transactions grew 96 per cent. Mobile transfers now exceed BPAY volumes through Netbank.

"In addition to investing in our people, we have prioritised investment in technology and innovation to make life easier for our customers in a banking environment that is increasingly digital and mobile," he says.

"Though many of our investments are future-focused, we have already seen strong uptake of our digital wallet and mobile offerings such as Cardless Cash and Tap & Pay, and of new CommBank app services including portfolio view, loyalty card storage and tailored merchant offers.

"In the first half we also invested in cyber security, blockchain and quantum computing, with an eye to building leading-edge technologies, platforms and skills for the future."

Narev says the group's results indicate the Australian economy has diversified as it became less reliant on the resources sector last year.

He says export-sensitive industries, including tourism and agriculture, are starting to benefit from sound monetary policy.

"The transition is still in its early stages. So global volatility concerns our customers, and presents challenges here in Australia," he says.

"We must be cautious, but also remain focused on the long-term to ensure that Australia remains a great place to live and to invest.

"Continued progress on key policy foundations such as tax and infrastructure will be critical to support business innovation and job creation."

With the conclusion of the Financial System Inquiry, Narev says all political, regulatory and industry participants need to be 'forward-looking' and build on the strength of the economy.

CBA has declared an interim dividend of $1.98 per share to be paid on March 31.


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