The Commonwealth Bank has announced a full-year after-tax profit of $9.93 billion, a 7.6 per cent rise.

The rise in profit comes as Australia's biggest bank faces allegations its intelligent deposit machines were used by money launderers and criminal gangs.

With anti-money laundering agency AUSTRAC launching its court action just last week, the likelihood of penalties in the millions, or potentially billions, of dollars has not affected CBA's 2017 financial year results.

The company's preferred measure of cash profit, which excludes a range of one-off and accounting items, grew a smaller 4.6 per cent to $9.88 billion.

A reduction in bad debt costs, to just over a billion dollars, and cost-cutting helped the bank achieve much of its rise in profit.

It also reported a 4.3 per cent increase in banking revenue, thanks to growth in home and business lending, as well as deposits.

CBA said its independent rate rises, particularly on investor and interest-only home loans, were more than offset by higher wholesale funding costs and increased competition in the lending market, leading to a small reduction in its net interest margin.

The net interest margin is the gap between the rate the bank pays to borrow money at and the rate it lends it out at, and its key source of profit.

Dividends edge higher

The rise in profit has allowed the Commonwealth Bank to increase its payout to shareholders from a total of $4.20 last financial year to $4.29 in 2017.

The modest 2.1 per cent rise in shareholder payments likely reflects CBA's need to increase its capital — or safety reserves to protect against severe losses — in light of tougher regulatory requirements being phased in by the bank regulator, APRA.

At 10.1 per cent, CBA is currently short of APRA's proposed 10.5 per cent requirement, which will take force from January 1, 2020.

As part of its profit announcement, CBA also revealed that John Symond had exercised an option to sell his remaining 20 per cent stake in Aussie Home Loans to the bank.

The Commonwealth Bank is scheduled to take full ownership of Aussie Home Loans by late August.

Commonwealth Bank shares were up 1.1 per cent to $81.57 by 10:28am (AEST), as the result slightly exceeded market expectations.

CBA board responds to money laundering court case

The Commonwealth Bank's board has continued to try and manage the intense public fallout from CBA's latest scandal, where tens of millions of dollars in criminal proceeds were allegedly laundered through the bank's so-called Intelligent Deposit Machines (IDMs).

The money laundering is alleged to have occurred over several years and despite repeated warnings from the Australian Federal Police that it was taking place.

However, CBA's chairman Catherine Livingstone said in a statement that it was only brought to the board's attention in the second half of 2015.

She said at that point CBA "promptly" fixed the coding error, which appears somewhat at odds with AUSTRAC's Federal Court statement of claim.

Ms Livingstone said that there had since been a change in senior leadership in key roles related to financial crimes compliance and risk management.

She also said that the bank had recruited more than 50 financial crime compliance professionals and invested $40 million in new financial crime monitoring technology — which raises the question of whether CBA had seriously under-invested in this area prior to this case being brought to its attention.

The board has already cut its own directors' fees by 20 per cent and removed the short term bonuses of senior executives for last financial year, but Ms Livingstone did not rule out further sanctions.

"As the board considers the substance of AUSTRAC's claims, it will take an active role in addressing any further management accountability for the alleged actions or omissions," she said.

"The board notes that it has no reason to believe that the allegations arose from deliberate or unethical behaviour, or any commercial motive."