Picture: NewsWire / Damian ShawAustralia's largest bank has reported an eye-watering profit but warns the economy and mortgage applications are slumping. In its latest update to the market, Commonwealth Bank reported a 15 per cent slump in loan applications since May. At the end of July, National Australia Bank said there was a 15 per cent slump in its mortgage applications, while Westpac reported a 20 per cent drop in demand for its mortgages. On Wednesday, CBA reported its cash profit had increased by 7 per cent, with its operating income growing by 6 per cent. Picture: NewsWire / Max Mason-HubersThe market predicted CBA's full-year profits of about $10.85bn, with CBA raising its dividend to $2.70, up from $2.60 last year.