Good afternoon, good morning, everyone. I'm Kattiya Indaravijaya, CEO of KBank. Thank you for your time today. Together with me are Khun Chongrak Rattanapian, the President of KBank, Khun Sansana Sukhanunth, Executive Vice President and CFO of KBank. Firstly, I would like to give you a brief of our view on the operating environment and challenges we might face. Thai GDP in 2024 is expected to grow at 3.1%, mainly driven by continuous rebound in tourism, export, and government spending. However, the uncertainty of the global economy may continue to weigh on Thai economic recovery. Thai economic recovery has been uneven. It will grow better than last year, but downside risks remain high and uneven and K-shaped economic recovery. Meanwhile, Thai economy is expected to grow around 3% in 2025 and 2026. This graph demonstrate Thai economy since 2015.
Many events and crises occurred. We could see that Thai economy exhibit limited growth. The performance of the overall banking industry is as evident in the picture. KBank performance is also as evident. We have heard all your concerns, questions, such as: What is our normalized level of credit cost, and when we will achieve that? Weak fee income, when it will improve, and how we will generate the new revenue? Cost management, and can it be lower? Can the productivity be improved more? And single-digit ROE, and when ROE will be double-digit? What is our dividend policy? So I do hope that today's session will address some of this concern and questions, and relieve some of your doubt. So I would like to take about 20 minutes to take you through our new strategy and plan to achieve double-digit ROE. This is our three-year strategy.
It might sound the same to some of you, but not to us. It's significantly different in terms of our intention, execution plan, and our monitoring. We set up the steering committee, and I'm the one who chair this weekly meeting, together with our new management team, to rigorously monitor, prioritize, and support, and make key management decision. The bank will continue to conduct business with the good corporate governance principles, and we will deliver sustainable values to all stakeholders, which are customers, employee, regulator, society, and last but not least, and even more important, to address shareholders. To achieve our goals, we come up with the 3+1 strategy in this picture. Reinvigorate credit performance, that's number one. Number two is scale capital like fee income businesses, number two. And number three, strengthen and pioneer sales and service models.
The +1 is a new revenue creation for medium term and long term. If we could do all this, the bank will have a high-quality earning and value-based result. We will have a proactive risk management and better asset quality. We will have value-based productivity enhancement. Those will help enhance risk-adjusted return on capital to uplift shareholders' value and reach the double-digit ROE in 2026, and we commit to that target. Allow me to take you through each one of these priorities in detail. The first strategic priority is reinvigorate credit performance. This year and the next few years, we will focus on two groups. The first two group is actually all existing KBank customer. The first group, the new to credit, but is a KBank customer, which will focus on the existing non credit customer, aiming to regrow quality of credit product portfolio.
And we will focus on growing new loan quality to secure credit product, which focus on middle-income customer and the higher segment. How we be able to identify the customer in these two group? We will utilize the data-driven modeling techniques and using the internal data. For example, existing K PLUS customer transaction and all the other payment data. The second group is the existing credit customer, the healthy one. We will proactively retain our customers, especially consumer and the SME segment. We will conduct and cross-sell, up-sell to increase share of wallet to targeted good performance customer. We will early detect and identify, the customer that have tendency to refinance, and we will take the preventive action in timely manner. And we will strengthen relationship with corporate, customers and their supply chain to capture the new business, opportunity to proven track record.
This first year, we will focus on cleaning, building, capacity to prepare ourselves to deliver the result within three years. The percentage of NPL inflow and credit costs will improve from refocusing in secure loan products and upper customer segment. For this slide, I will not go into details, but let me tell you this. Last year, we have managed the 2022 outstanding issue. Some of them are already relieved, but some still require continuous management. Good news is that we managed to reduce the credit cost of this outstanding issue by 10 basis point. However, the targeted credit cost this year remain at this level to provide cushion for economic uncertainty and unexpected incident from big, corporate customers. Let me tell you more about what we have been doing.
We calibrated the credit approval model to incorporate lesson learned from 2022, resulted in new NPL inflow significantly reduced by approximately 60%-70%. We have enhanced early warning sign to capture abnormality transaction and deploy near real-time monitoring in all segment, result in percentage of early NPL significantly reduced from 3% to 0.4%. NPL from fraudulent, activities, from document forgery, detected and prevented was also reduced significantly, nearly THB 1 billion. For loan collection, we have also utilized collection analytics to identify persona and right treatment. The second is a scale capital-light fee income businesses. This will consist of wealth management, banc assurance, and payment. We will do further upgrading wealth advisory business in several ways and leveraging our market leading position in K PLUS. We split this into-- in the slide, into three groups.
I will start talking about the wealth management and bank management business first. So for this, we will provide the sustainable and holistic wealth advisory and service through our customer's life stage that will help boost fee income to the bank and investment return to the customer. We have seen some of the data in 2023, that there's only 3.8% wealth penetration from customers as a bank as a whole. But in mutual fund and bank assurance, look at the private banking, the opportunity, the non-penetrated customers will be around 20%. The bank assurance is around almost 50%. That's the opportunity. And also looking at the affluent segment, the lower segment from the high net worth, the room both for bank assurance and mutual fund is about 50%.
So there's a lot of room to grow for wealth management product and bank assurance. We categorize it into three groups. Comprehensive product offering. We will personalize product offering and leveraging customer financial data, and use in-depth data analytic model to suit customer persona at the right moment. For mutual fund, KAsset, you might see in the news. KAsset has strategic non-equity collaboration with JP Morgan and Lombard Odier. We saw the opportunity of the Thai investor that statistically is 30% of Thai investor, they already invest overseas. So this partnership will help us, you know, provide more variety of fund selection from the open architecture strategy. So the target of KAsset within 2026, the AUM will grow at 30%-40%.
We will strengthen sales and service capability, especially high net worth and the affluent segment, with the collaboration between private banking and the branch network. Because we are the universal bank, we should, you know, build on our strength, not only just the private banking or investment product, but we should integrate the transactional banking together to serve our private banking, high net worth segment, the affluent segment. For bank assurance, we will uplift customer experience and launch new sales and service model, improving after-sales service and regularly visit customer. We saw the pain of in the bank assurance product, which is mostly is a after-sale service. The one who buy bank assurance from the bank usually get worse experience than buying from the agent. We will fix that, and we will set the team within the bank to improve the customer experience.
Product offering will be better, especially in the health and legacy. Legacy is the one which is kind of inherent, kind of product that focus on the high net worth and affluent. 2024, in the insurance market, grow at 10%, we will focus on the whole life and the health, insurance. For sales and service, model enhancement, we will build single trusted relationship for integrated sales and customer service with the wealth expert in the branch, and the specialist in the high net worth or the private banking RM. And we will enhance wealth function on K PLUS, because of, from our statistic, more than 90% of new mutual fund account opening do it and apply it via K PLUS.
Another issue is that the number of our licensed sales, they're quite huge, but the sales rate, some of the staff is not even start to sell either mutual fund or bank assurance. So we will provide necessary enough tools to facilitate sales, meaning that the tool support from head office with the intelligent will be in the head office. And the strategy we're using, we will leverage the data analytics to see which type of customer we what product we should sell that fits to their needs and their lifestyle. So yeah, that's a lot of opportunity. The wealth RM now we have like 2,400 person, both from for bank mutual fund and bank assurance.
The last one is the wealth brand strengthening, which is WISDOM. We, we have a brand called WISDOM. We will use that, you know, the holistic wealth advisory service and integrated customer offering, and revisited the exclusive financial benefit and privilege, which go tier by tier. For payment, which is the another capital light fee income category. For payment, which we got a lot of questions regarding this payment. So the target is that we will, you know, maintain our position as a dominant digital payment bank and increase the main operating bank by using the K PLUS. For payment, we categorize product into two groups. One is the product that have a negative or low growth, which are debit card, SMS alert, check collection, online direct debit, retail transfer through the traditional channels.
In this category, you know, the one who have a low growth or negative growth, we will optimize costs by continuing to migrate customer to online channel and renegotiating with fee with partner. For example, like switching the operator, you know, both in Thailand or in the international. This second group of the product that have a positive growth and have a potential to grow in the future, this contribute around 70% of the total revenue from payment. And last year, growth, this category is grow by 19%, whereas the negative growth is a - 14%. So net of the payment revenue still grow at 6%. Mm-hmm. We will boost the fee. This positive growth is FX merchant acquiring and the cross-border payment business.
So with the second group of the product, we will try to make it grow and exceed the negative growth in the area, and compensate the, loss in the revenue in the first group c hannel. The third is, strengthen the, and pioneer sales and service model to deliver value-based result. We will create the digital-first experience and cross-channel integration to deliver better customer experience and sales and service. Look at the, our leading position for K PLUS, our mobile banking. We have, twenty-two million user, and, with a 73 active, and a 34.7 market share in the transaction. And we are the mobile banking in Thailand that have the least downtime. In terms of cost per transaction, we will continue to improve, you know.
The cost per transaction we improve, we will decrease by 35%-40% this year, and 40%-45% in 2025 and 2026. Also, we have K BIZ. You know, K BIZ is the application to offer one-stop banking solution for the small and medium business. We will optimize the digital sales and service cost by looking at the overlap of the service between the digital channel and the physical channel, and migrate the simple one to the digital channel. And as I mentioned earlier, there's a new mutual fund account open in K PLUS. You know, the account opening for mutual fund, 90% open via K PLUS.
In addition to that, the transaction, when they open the mutual fund account, the transaction usually do it through the digital channel, which is 90% of all the transaction, and is 53% growth year-on-year. In terms of cost per transaction, we reduce the cost to serve for all channels. It now is reduced to THB 0.28 , and it's improved 32%. And it will continue to improve the productivity during these channels. We will migrate the basic transaction to the digital channel, and if it's a complex transaction, kind of a transaction, we will have the human assist channel. And we will see, you know, the customer going to branch decrease every year.
However, still, 50% of the customers still prefer going to branch for the complex transaction, and we see the proportion of the complex transaction in the branch, 30% last year. For the ATM machine, we will focus on the right sizing by focusing on the location optimization. To tell you some statistic, we have 18% in terms of number of ATM machines. However, we have 32% in terms of transaction. So low ATM machine, however, the transaction is almost double. We also have lowest cost per transaction compared to other banks. For new revenue creation, I will assure you that we will stay focused on the domestic business. However, we cannot deny that we should invest for the future, the medium term and long term.
So we call this the +1 , the new revenue creation for medium terms and long term. The bank will continue to cautiously explore this opportunity, while closely monitor the risks, and be ready to take the immediate and timely action for the risk mitigation whenever is required. This +1 will contribute 5% of net profit within five years. This consists of, on the right hand, is KIV. You know, it's a new business model, a new business partner to address the financial service, new customer segment. The one in the middle is the regional expansion. We will focus on the Indonesia, Vietnam, and China. It will be still the asset-light strategy and digital strategy.
The far right, beyond banking and innovation, there's this one consists of make the application that is for the saving and investing for the new generation. Right now, we have two million user, and the target will add one million this year. So the Net Promoter Score is 90%. And we will have. y ou will see in the slide, like, the digital asset, the innovation on the ESG. You know, there's still, we're still in the test exploring stage, so the number will not be significantly. So in total, this +1 , 5% of net profit in five years. Enabler, what we do differently is that, you know, both the modern technology, the data and AI, and also the high performance-driven organization.
What we do different is that, it's, we will align. All of this will strictly align with the 3+1 strategy. And we have, three enabler. The modern technology, we will continue invest in the core banking and the mobile banking platform to be able to handle double size of the transaction. And also, you know, to align with the 3+1 , the master plan for IT, you know, for both, credit, wealth management, and the channel distribution, will be, you know, in, in this master plan. And also the, AI, you know, the, the, the data that produce the lead, that customized by customer and sales team, when and what to be, what should be sold to the customer, it will be more, precise. Same as the data analytic.
We will do the improve both end-to-end, you know, data infrastructure, and make all the data close to the sales team and to make the decision to offer the product. The performance-driven organization, we will align the organization design, way of work, you know, to support the execution of the strategy. And also the rewarding will be strictly aligned with the result of this 3 + 1. The training, the tools, the equipment, the mindset, and the skill, everything, we are also, and all the resource allocation will focus on this 3 + 1. Let me tell you one example about the reward that we have test, you know, in November and December last year. I am the one who, I mean, the sales team, both the corporate and the retail customer segment.
So all the branch team, all the large, corporate RM, they directly report to me. So I test that I change the point system to align with the, I mean, the product that have highest, ROE, you know, give the return, best return to the shareholders, it will get the highest point. So the point system is realigned, and the reward as well. So this have been test in November and December, and the result is significantly improved, both in the mutual fund and bank assurance. So this our 3+1 strategy, and if we be able to do it, we will have a higher quality earning with the value-based result, and a proactive risk management with the improving the asset quality, and also the huge improve in the productivity. So next is our financial targets.
ROE, as I mentioned earlier, will reach double digit in 2026. But for this year, this year target 2024, NIM maintain in line with the interest rate trend and the selective loan growth. Cost of fund remain high from last year, rising interest rate. Loan growth is about 3%-5%, s ensible loan growth, corporate 2%-4%, SME 1%-2%, retail 1%-2%. Focusing on growing quality loan and selective recovering sector and asset quality. You might concern that the loan growth last year is -0.2%. How the revenue from interest and revenue will look like? This year we will still improve the credit cost, the capacity, the capability to underwrite the credit, to monitor the credit and take action immediately.
So the NII, net interest income, might not increase much, but the credit cost will reduce in a meaningful way. So the net of revenue net to the risk, it will increase. Net fee income will be at the mid- and high-single-digit. And the cost-to-income ratio will be low- to mid-40s from the continuous cost improvement and productivity improvement. Credit cost will be in 175-195 basis points, is already peak in 2022. However, in this year will still remain high to cover future uncertainty, and the normalized credit cost will be in 2025 by 140-160 basis points. NPL ratio will be stable and less than 3.25% amid the uncertain economic recovery.
For the dividend issue, over the past few years, we did not answer clearly about the dividend policy. This year, at least, we would like to inform you that we aim to pay not less than 25% dividend payout on the consolidated net profit. So what is changed is the 25% dividend payout, not less than that, and also on the consolidated net profit. Previously is a bank-only net profit. So this 25%, you know, might seems to you that is not that high, but that's a minimum that we will pay. So the real amount we pay, please wait till we have a board meeting and, you know, have a right time to announce.
For the capital, CAR will remain adequate at 19%, and CET1, core Tier 1, will stay at the 16% level because of the... to cover, to be able to cover the Basel, the new Basel, and the ongoing uncertainty. Okay, so this will end of my presentation.