(Reuters) -Commonwealth Bank of Australia ( CBAUF ) reported its best full-year cash earnings of A$10.25 billion ($6.69 billion) on Wednesday, and announced a record dividend payout on the back of strong home and business lending growth and stable margins.

CBA, Australia's biggest bank by market value and mortgage portfolio, said its cash profit jumped to A$10.25 billion for the fiscal year ended June 30, ahead of a Visible Alpha consensus of A$10.24 billion and last year's A$9.84 billion.

It declared a final dividend of A$2.60 per share, compared with A$2.50 apiece it paid last year. Its full-year dividend payout of A$4.85 apiece is the highest ever.

CBA's cash earnings rose on strong core lending growth and stable underlying margins. Interest rate cuts by the central bank lowered its loan impairment expenses as economic conditions improved and home loan payment delays stabilised.

"Many households have seen a rise in disposable incomes due to the recent relief from reduced interest rates, lower inflation and tax cuts," CBA said in its full-year earnings report.

The bank warned that the broader environment remained characterised by "a rise in global macroeconomic uncertainty, increased geopolitical risk and continued domestic competitive intensity", but said it maintained "prudent balance sheet settings over the long term".

CBA, which underwrites a quarter of Australia's A$2.2 trillion mortgage market, saw its home and business lending grow 6.1% and 12.2%, respectively, in fiscal 2025, both outpacing the average growth seen by the overall banking system.

Its net interest margin, a key measure of profitability, rose 9 basis points from last year to 2.08%. The common equity tier 1 capital ratio, a measure of spare cash, was flat from last year at 12.3%.

($1 = 1.5323 Australian dollars)