(Reuters) -Commonwealth Bank of Australia ( CBAUF ) said on Wednesday its annual cash profit slipped 3%, as its margins took a beating from rising costs and intense competition.

CBA, which writes around a quarter of the country's mortgages, highlighted a growing trend of borrowers struggling to meet their payments due to the double whammy of sticky inflation and high interest rates, leading to delayed loan payments.

Home loan payments due for 90 or more days were at 0.65% of its total mortgages at the end of June, an increase of 13 basis points from December-end.

"Many Australians continue to be challenged by cost of living pressures and a fall in real household disposable income," CBA said in a statement.

"Consumer arrears increased reflecting the impact of higher interest rates and cost of living pressures on some borrowers."

The bank's net interest margin, a closely watched measure of the difference between interest earned from loans and interest paid on deposits, fell 8 basis points to 1.99%.

The country's biggest lender by market value said cash net profit after tax was A$9.84 billion ($6.52 billion) for the year ended June 30, compared with A$10.16 billion a year ago.

That was ahead of an LSEG estimate of A$9.68 billion.

The bank declared a final dividend of A$2.50 per share, compared with A$2.40 a year ago.

($1 = 1.5081 Australian dollars)

(Reporting by Sameer Manekar and Roushni Nair in Bengaluru; Editing by Anil D'Silva)