Commonwealth Bank of Australia saw a 22 per cent record increase in net income for the year to 30 June 2011, from A$2.75 billion in the previous year to A$3.34 billion ($3.5 billion).

The result was helped by strong growth in retail and business average interest-bearing deposits, which rose 11 per cent to $326 billion. Asset growth for the year was fully deposit-funded, the bank said in a statement, with client deposits accounting for 61 per cent of the total group funding. 

The underlying profit for wealth management also improved marginally despite volatile markets, posting an 12 per cent drop to A$642 million in the year to June, from A$718 million in the previous year. Of the companies under its wealth arm, including Colonial First STate, Colonial First State Global Asset Management, and CommInsure, CFSGAM stood out with a 6 per cent increase in cash profit to A$281 million.

Over the last 12 months, CBA has been embarking on a series of initiatives to improve client service and drive productivity higher. These include the launch of a core banking modernisation system, which has successfully migrated all retail and savings transactions into a single, better organised system. Investment opportunities in other parts of Asia are also ongoing.

Despite the strong results, however, CBA remains subdued with regard to its outlook for the rest of 2011.

"The 2011 financial year has been characterised by subdued system credit growth and intense competition. At this stage there is nothing to suggest that the 2012 financial year will see any material improvement on this front. Nor is it clear what the catalyst will be for a meaningful revival in consumer and corporate confidence which is a prerequisite to stronger demand for credit," said Ralph Norris, the chief executive of CBA. 

A final dividend of $1.88 per share was declared, an increase of 11 per cent from the prior year. This will be fully franked and paid on 6 October.