The Commonwealth Bank of Australia (ASX:CBA) has announced its intent to conduct a further A$1 billion on-market share buy-back.

They declared a final dividend of 240 AU cents per share.

The bank is well provisioned for changing financial conditions.

Troublesome and impaired assets are expected to amount to A$7.1 billion for FY23, while gross impaired assets are set to increase by A$0.3 billion to A$3.3 billion.

The bank has observed a moderate consumer demand and a slowdown in economic growth.

An escalation of downside risks is being observed as rising interest rates are having a lagged impact on mortgage customers.

The total impairment provisions for FY23 are expected to be A$5,950 million.

Consumer arrears have seen an increase in recent months but remain at historically low levels.

Once the buyback is complete, the bank’s CET1 capital ratio is expected to reduce by approximately 20 basis points.

The bank is closely monitoring the impact of reduced discretionary spend, especially on its small and medium-sized business customers.

The bank is anticipating competition, customer deposit switching, and higher wholesale funding costs to continue posing as margin headwinds in the next financial year.

It is aiming for a full year dividend payout ratio of 70% to 80%.

It is expecting margin headwinds to be offset partly by the benefit of higher average cash rates in the next financial year.

As of the end of FY, home loan 90+ days arrears were at 0.47%.

The bank plans to continue targeting a full year dividend payout ratio of 70-80% of cash NPAT.

Commonwealth Bank of Australia (ASX:CBA) is a leading provider of financial services in Australia.