Investors are eyeing a possible share buyback or special dividend from the Commonwealth Bank at its full-year results this week, despite profits coming under pressure in a tough environment for retail banks.

The banking giant is due to hand down annual results on Wednesday, and analysts are tipping a cash profit of about $8.6 billion for the year, compared with $9.2 billion last year, after compensation and compliance costs from past scandals hit its bottom line.

CBA is forecast to notch up a profit of about $8.6 billion for the year. Credit:Glenn Campbell

Banks profits are also being eroded by cuts to fees, slower home loan growth, and a crunch on profit margins as interest rates drop to new record lows.

Despite CBA's lower profitability, however, the bank's shares have performed well, in part because CBA is expected to release capital after selling off its funds management business to a Japanese Bank for $4.2 billion. The divestment of Colonial First State Global Asset Management (GFSGAM), which was completed on Friday, will push its capital ratio beyond the level required by regulators.