Commonwealth Bank CEO Matt Comyn is hoping for a “short, sharp contraction” in the economy and says consumer spending must fall to prevent the Reserve Bank increasing the official cash rate beyond 3 per cent and triggering a recession.

Announcing a bumper full-year profit of $9.6 billion, up 11 per cent as it unwound pandemic-related buffers, Mr Comyn said the record low level of bad debts was a lagging indicator. He predicted things will get worse if consumers don’t pull in their horns and the RBA is forced to crack the whip harder to stymie inflation.