No special dividend at the Commonwealth Bank but payout rises "Show me the money" investors cried and sure enough Commonwealth Bank did, with an impressive 10 per cent rise in underlying net cash profit to a record $7.8 billion. But in typical bank style Australia's biggest lender took a cautious approach as to how much of that profit it would pay to shareholders, refraining from paying out a special dividend. The final dividend was increased to $2 a share, taking the annual fully franked dividend up to $3.64 a share, a rise of 9 per cent on last year. On the surface that looks generous but some banking analysts were hoping for a much bigger payment, given that this dividend only bumps up the payout ratio from 74 per cent to 75 per cent, well shy of the indicated maximum of 80 per cent of profit. Still, investors will be reasonably pleased with the quality of this profit result, which backs up the strong rise in Commonwealth's share price which has produced an impressive total annual return of 40.65 per cent according to Bloomberg figures. Commonwealth chief executive Ian Narev is keeping up his prudent approach on the capital side, paying for the no discount dividend purchase plan by buying the same number of shares on market. That keeps the share register tight and prevents earnings per share from being diluted, giving Commonwealth's share price room to move still higher in tandem with dividends and profits. The key to how Commonwealth has been able to boost its profit so strongly despite weak credit growth and sluggish economic conditions is that revenue growth of 7 per cent comfortably outstripped growth in costs of just 4 per cent. That profit boosting formula, combined with Commonwealth's conservative approach to credit quality and superior computer systems, should allow earnings and dividends to continue climbing, particularly if economic conditions improve more than expected. The writer owns Commonwealth Bank shares.