Narev calls for blueprint on economy

Commonwealth Bank chief executive Ian Narev has appealed to the next federal government to lay out a clear plan for driving growth and reigniting confidence in a post-mining boom economy.

After delivering a record $7.8 billion cash profit and raising dividends on Wednesday, Mr Narev said it was crucial that whatever the election result, the winner provide a clear and "inspiring" plan to help the economy to thrive.

With confidence remaining weak, the boss of Australia's biggest bank said lower interest rates and the weaker dollar would not instantly boost confidence on their own, and the next government should develop policies to help the economy fire.

From his discussions with customers, Mr Narev said many members of the public were struggling to understand the implications of falling resources investment.

"What does it matter if the economy's less dependent on resources? What will it therefore be more dependent on? What sort of policies can help those businesses and what does that mean for the economy overall?

"I certainly don't have the answers to all those questions, and maybe the incoming government wouldn't have the answers to all those questions.

"But I just think we need a clear picture for how the economy might look, and what sort of policy responses a government might do in order to strengthen the economy for the long term."

The comments came as Mr Narev said he expected more "mixed" economic conditions over the coming months, after the bank said cash earnings rose 10 per cent in the year to June to $7.8 billion.

The bank also lifted its final dividend to $2 a share, but did not deliver a special dividend as some investors had been expecting.

Over the year to June, CommBank profits were bolstered by a decline in bad debts and wider net interest margins, which helped drive a 13 per cent surge in earnings from its flagship retail bank to more than $3 billion.

But Mr Narev was cautious on the economic outlook. Although official interest rates are at 53-year lows and the Australian dollar has plunged in recent months, Mr Narev said these trends had not had the "magic" effect of lifting confidence, which would take time.

He said there were early signs exporters were more confident, but little evidence non-resources businesses were bouncing back.

Despite the cautious commentary, the better-than-expected result bodes well for rivals Westpac, NAB and ANZ, which all enjoyed share price rallies on Wednesday.

The result was generally well received, with Deutsche Bank analyst James Freeman saying it would trigger upgrades of other bank stocks.

CommBank shares dipped after it did not pay a special dividend, a decision Mr Narev explained by saying the board was more concerned with payments that were sustainable in the long term.

Aside from the bumper earnings in its retail arm, the bank's institutional business and its New Zealand bank also grew strongly over the year, with profit up 10 per cent and 17 per cent, respectively.

With low interest rates helping many borrowers get on top of their debts, bad and doubtful debts fell by $466 million in the half.

The final dividend, fully franked, will be paid to shareholders on October 3. Dividends for the full year will be $3.64 - a 9 per cent increase on last year.