Commonwealth Bank of Australia has posted a robust rise in full year profit after economic conditions improved, and announced a $6 billion share buyback.

The country’s biggest lender on Wednesday reported cash net profit of $8.65 billion for the year to June 30, a 19.8 per cent increase from the year earlier, on the back of strong performance in its core retail, business and institutional banking divisions.

Its statutory bottom-line result was up 6 per cent to $10.18 billion.

It will pay a final dividend of $2 per share, up from a $1.50 a share interim payment in the first half.

The bank also announced an off-market share buyback of up to $6 billion, joining smaller rivals ANZ and National Australia Bank in returning capital to shareholders.

Chief executive Matt Comyn said the bank’s continued balance sheet strength and very strong capital position has allowed it to support customers while delivering strong and sustainable returns to shareholders.

“We are prepared for a range of different economic scenarios and are well placed to support our customers,” he said in a statement.

-AAP