The result also revealed CBA was entering into the buy now, pay later sector, putting it in direct competition with market darling Afterpay.

CBA will invest US$100 million in Klarna, a Swedish provider that is expanding in the key US market.

CBA will be its exclusive partner in Australia and New Zealand.

CBA said operating income fell 2 per cent after it removed fees, saw its profit margin decline over the year and experienced slower loan growth.

As income fell, its operating expenses rose 2.5 per cent, in part due to a big rise in the number of risk and compliance staff, which increased by 600. Investment spending rose by 9 per cent, also due to risk and compliance projects.

In the year to June, CBA said home loan growth had lifted to 4 per cent, as did business lending, while it lifted its the value of its transaction deposit accounts by 9 per cent.

Its net interest margin (NIM), which compares funding costs with what it charges for loans, was unchanged over the second half at 2.1 per cent, but fell over the year.

The bank said it estimated its NIM would narrow by 4 basis points over the year due to the impact of  lower interest rates.

Bell Potter analyst TS Lim highlighted that CBA's net interest margin was better than expected, and described the result as "solid." "No bunny out of a hat and still work in progress in slimming down, yet a solid outcome under difficult operating conditions," Mr Lim wrote in a note to clients.

White Funds Management managing director Angus Gluskie said CBA's result was "fractionally weaker than expectations," and this had likely triggered the fall in its share price. "I think there was some concern that the trends in that second half were a little bit softer than expected," Mr Gluskie said.

CBA said its cumulative spending on customer remediation had swelled to $2.2 billion and it was forgoing $415 million a year in fees as a result of changes it had made aimed at improving its treatment of customers.

Chief executive Matt Comyn described the outlook as "challenging," pointing to a "lower growth environment".

While the current context is challenging we have a strong franchise and our underlying business continues to perform well.

CBA chief executive Matt Comyn

He said the bank was committed to delivering "strong and sustainable outcomes for all our stakeholders.

"While the current context is challenging we have a strong franchise and our underlying business continues to perform well," he said.

"We are focused on execution excellence in our business and extending our leadership in digital, and the board and management team are committed to continued investment in our core business."

CBA is building up excess capital due to asset sales, as it has recently sold off its funds management business and is in the process of also quitting life insurance.

The bank said it was on track to have a capital ratio of 11.8 per cent of assets, which is well in excess of what local regulators require, and the board was considering returning some of that capital to shareholders, potentially including a share buyback.

CBA said its expenses for loan impairments edged up, but credit quality was still "sound," with the loan loss rate rising from 0.15 per cent of total loans to 0.16 per cent.

It said home loan arrears improved although there remained pockets of stress in parts of Sydney, Melbourne and Perth.

About 4.5 per cent of its home loan balances were in negative equity - where a customer owes more than the house is worth - with three quarters of these loans were in Western Australia and Queensland.

The nation's banks are reeling from scandals in wealth management after a run of scandals and CBA on Wednesday also said it would close down its remaining financial advice business, Financial Wisdom.

CBA said it would close down Financial Wisdom by mid 2020, at a cost of $26 million to the bank.