SYDNEY Commonwealth Bank of Australia on Wednesday posted a jump in first-half profit and said it would buy back shares worth A$2 billion ($1.43 billion) as strong lending growth cushioned the hit from intense competition for home loans.

       The bank said its lending growth outpaced rivals in both the business and home segments in the last six months of 2021, riding on a recovery in the economy from the pandemic.

       But its margins narrowed to 1.92% from 2.06% a year earlier and were 17 basis points below the second half of fiscal 2021 due to stiff competition in the sector.

       CBA said the weakness was likely to continue as the country's lenders attempt to protect market share by offering more attractive home loan rates. The margin pressure has also been worsened by a customer shift towards fixed-rate loans, which tend to be priced lower than variable rates.

       Rivals Westpac https://www.reuters.com/markets/stocks/australias-westpac-sees-more-margin-pressure-cash-profit-drops-20-2022-02-02 and Australia and New Zealand Banking https://www.reuters.com/markets/asia/anz-shares-near-one-year-low-home-lending-competition-crimps-margins-2022-02-06 Group have also flagged margin pressure in recent days and National Australia Bank, the last of the so-called "Big Four", is expected to follow with a similar warning on Thursday.

       CBA's cash profit climbed to A$4.75 billion in the half, from A$3.87 billion a year ago, beating an average estimate of A$4.35 billion from four brokerages.

       Chief Executive Officer Matt Comyn said he expected the country "to have a strong year in 2022 " as it reopens its borders to the world.

       The lender also raised its interim dividend to A$1.75 per share, totalling around A$3 billion, from the A$1.5 a share it paid to shareholders a year earlier.

       Its new buyback comes on the heels of a record A$6 billion share repurchase it undertook after its full-year results in August. ($1 = 1.3994 Australian dollars)- Reuters