Australia's biggest lender has also flagged a strong year in fiscal 2022 as the economy gathers pace after the challenges from the Omicron variant of COVID-19.
CBA said net cash earnings, the bank's preferred measure of profitability, rose 23 per cent to $4.7 billion in the six months to December 31.
Its statutory net profit climbed 26 per cent from the same period last year.
Revenue rose three per cent to $12.26 billion.
CEO Matt Comyn attributed the higher profits to "volume growth across the business in home lending, business lending and deposits, flat operating costs and significantly lower loan impairment expense."
It also got an earnings boost from reduced remediation costs related to the banking royal commission findings released some years ago.
Despite the encouraging bottom line, CBA recorded a sharp drop in net interest margin, or what it earns on loans less funding and other costs. The NIM fell 14 basis points from the previous six month period to 1.92 per cent.
This was mainly driven by switching to fixed rate home loans, rising swap rates and continued competitive pressure in the home loan market.
The lender expects the pressure on margins to persist in the second half of the financial year, as more customers switch to fixed rate loans ahead of a likely increase in interest rates.
Despite lower margins, CBA's net interest income rose 1.5 per cent in the first half, as the bank grew faster than the industry average rates in home and business loan market as well as in deposits.
The lender is counting on the economy to have a strong year in 2022, saying the risk of price inflation in Australia is low compared to the country's global peers,. Its economists are forecasting interest rates to rise in August, for the first time in years.
"Australian households have accumulated savings and stronger wage growth is expected," it said.
CBA increased its interim dividend for shareholders to $1.75, up 25 cents from a year ago.
It also plans to buy back $2 billion worth of its shares trading on the ASX, on market, giving investors another boost.
This comes after CBA bought back $6 billion worth of stock in fiscal 2021.
CBA H1 PROFIT JUMP
* Cash earnings up 23pct to $4.7b
* Net profit up 26pct to $4.7b
* Revenue up 3pct to $12.26b
* Fully-franked final dividend $1.75/sh vs $1.50 cents year ago.
