Commonwealth Bank has posted a $4.27 billion half year profit, up 14 per cent on the previous year.

The cash profit, a measure banks use to reflect underlying performance, rose in the six months to December 31 amid subdued economic conditions.

The result compares to a cash profit of $3.75 billion in the same period in the previous year.

The bank’s net profit, which includes one-off financial items, was $4.21 billion, up 16 per cent from $3.63 billion in the previous year.

Commonwealth Bank chief executive Ian Narev said the outlook for the global and domestic economies remained cautious and the bank would continue to maintain a strong balance sheet with high levels of capital and provisioning.

“We have seen, in recent weeks, that there is still volatility in global markets,” Narev said.

“The risks presented by that volatility continue to suppress business confidence.”

He said there was little evidence of a meaningful increase in investment in Australia’s non resource sectors, other than housing.

But, he said, growth forecasts for developed economies had improved, consumer spending had grown over the holiday season and there was positive activity in the housing sector.

“So all in all, we continue to assume that any improvements in economic activity in the next year will be gradual rather than dramatic,” Narev said.

Narev said the results demonstrate the benefits of the bank’s long term strategy to focus on technology and productivity.

“We have strengthened our focus on enhancing the financial well-being of our customers and have used our leading technology platform to deliver innovative products and services to business and personal customers,” he said.

The bank also reported strong deposit growth over the half, up $40 billion on the previous corresponding period to $426 billion.

Customer deposits now account for 63 per cent of the bank’s total funding.

Commonwealth Bank shareholders will receive an interim dividend of $1.83 per share fully franked which will be paid on April 3.