Hello everyone, and welcome to BBVA Investor Day. I am Rafael Salinas, Chief Financial Officer of the group. As you know, I've been in office for a short period of time, but I should say that it has been quite intensive. In less than a month, we have reported excellent results, and we have announced two very important developments for the group. First, we will soon start executing one of the largest share buybacks in Europe for an amount of EUR 3.5 billion, close to 10% of our shares. Second, we launched the voluntary takeover bid for Garanti's minority interest. For those of you that are new to BBVA's equity story, we hope that this event serves as a good introduction to the group.
For those who have been engaging with us for some time, we hope that today's session will provide more clarity on the group's profitable growth strategy, capital allocation, and long-term aspirations. As you will see in our management presentations, BBVA is in an excellent position and ready to continue growing and generating shareholder value. Now, let me turn it over to Patricia Bueno, Head of Investor Relations, who will be moderating today's event.
Thank you, Rafa. Good afternoon. Good morning for those watching us across the Atlantic. Today's agenda will start with an opening presentation from both our Chairman and CEO. Carlos and Onur will highlight BBVA's strategy and long-term goals. It will be followed by a Q&A session. We will continue with the group's main levers for growth, our digital transformation, and our commitment to sustainability as a growth opportunity. Followed again by a Q&A session. Lastly, the country managers of Spain, Mexico, and Turkey will give you a more in-depth look on how the bank operates and how we'll be accelerating profitable growth in our main markets. They also will be available for a Q&A session following their presentation. We will end the event with our Chairman's wrap up of the main takeaways of the day.
Thank you, Patricia. I will leave you to hold the rest of the event now. First, without further delay, let me introduce you to someone who fully embodies BBVA's commitment and will be officially opening the session. Please welcome Carlos Torres Vila, Chairman of BBVA.
Thank you. Thank you, Rafael, Patricia. Good afternoon, good morning to all of you. Thank you for joining us for our Investor Day. It is a very important day for us. We had it scheduled for March 2020, but we had to cancel it. Much as we would have loved to host you personally here in Madrid, we now settle for the virtual version, which in any case, I hope you enjoy. We will be providing you with a thorough overview of our strategy, also giving specific targets for 2024, quite exciting ones, I believe, as we accelerate profitable growth. I will start with a bit of context around the post-COVID macro recovery and also the opportunities associated with the new technologies and platforms that keep emerging and developing at a faster and faster rate, leading us in what we call an age of opportunity.
After last year's economic collapse due to COVID, we see signals of strong growth. In consumption, as you can see on the left-hand side of this page, the index based on the usage of BBVA cards and POSs in the markets where we're in our footprint, is 50% higher than what it was pre-COVID. That is when comparing with the same week of 2019. In a similar fashion, total investment, which you can see below, is 25% higher than in the same period of 2019. This recovery has been supported by the swift reaction from governments and central banks last year that clearly contained the damage. The quick rollout of vaccines, which has allowed us to resume most activities and that together with the high accumulated savings, which also had a bearing.
Now, with the worst of the pandemic behind us, growth is back. Global GDP is expected to expand by 6.1% this year, another 4.6% next year. But that, unfortunately, is coming also with some disruptions to supply chains. We're seeing production bottlenecks, energy prices going up, also sharp increases in the inflation metrics. Very understandable after such a stop and go. Consensus is that these factors will gradually fade away, but it's true also that they have been more persistent than was expected, and that they are affecting the pace of recovery in the short term, and even forcing some central banks to raise rates. We've seen that in Mexico, in Colombia, in Peru. Others forced to start to lay out their strategies to exit QE, to exit the low or even the negative rate policy.
In any event, the context seems good for the economy and therefore good for banking activity. With rates also on the rise, that could give some support to banking results. The pandemic has also changed, in many ways, how we consume and has accelerated some preexisting trends. The lockdowns have been like a massive experiment in digital and remote everything. Through technology, we have kept in touch with each other, with teammates, with friends, with family, but we have also used it massively to buy things online and to consume online. This has affected every sector, every activity, every industry. As you can see on the chart, every sector has seen sharp rises in digital penetration, entertainment, utilities, insurance, travel, and of course, in banking. It has gone from less than 60% digital penetration to more than 80% of users connecting through digital in just 12 months.
Most of this increased digitization is here to stay. For many people who are less familiar with technology, this was a discovery from which they are unlikely to step down. Beyond digital, we are witnessing an unprecedented wave of disruption driven by innovation, what we call an age of opportunity. New technologies are emerging and evolving in many domains with a wide-ranging impact because they affect almost everything, all industries. They cut across sectors. We see, for example, in computing, the cloud growing incredibly. We have the blockchain and decentralized protocols still infant. We have quantum computing fast approaching commercial deployment. Or in the life sciences domain, the incredible revolution of genetics, the mRNA, gene sequencing, editing, new drug discovery methods. Or in energy with the pace of change, which is also incredible around, storage technologies or higher efficiency in the conversion of sunlight, for example.
In manufacturing with robotics, 3D printing, autonomous mobility, you name it. Of course, above all, I would highlight the magic of artificial intelligence. AI, that can be applied to any problem or task, and has massive impact. Now, tech disruptions have been always having a tremendous impact on economic growth and productivity. This time around, the combined impact on all sectors will be very deep, as shown on this illustrative chart on the page. Many of these technologies have been out there for some time now, but their penetration is still really, really low. As their penetration increases, unitary costs will be decreasing. They will become more competitive at exponential speed, and this will upend the existing ways of doing things. It will force positive change.
It will create opportunity if one embraces the change, if one embraces that opportunity and changes with it as we do in BBVA, and as we help our clients do across industries. Among the disruptive trends, decarbonization stands out as the biggest of all time, in my view. The scale and the breadth of the changes required for our societies to function without carbon emissions to reach net zero by 2050 is formidable. We need to change our habits, our behaviors. We need to deploy technologies, carbon-free technologies across all emitting sectors, electricity, shipping, aviation, all forms of transportation, industrial production of steel, cement, plastics, agriculture, raising cattle, forestry. Massive transformation, which requires colossal capital investments to an extent never seen before in any economy. The estimates are wide, but they are above $150 trillion for the period 2020 to 2050.
That amounts to around 5% of the world's GDP. The business case for much of this investment is already there. In other cases, it's not there yet. We have seen governments in rich countries already starting to take steps in the right direction. In emerging markets, the need is also very vast, the need to invest. It exceeds $1 trillion annually by 2030, and that's even without including China, and it's seven times the current levels. Now, with the right support from the developed world, this can be a huge opportunity for the emerging economies to develop renewable projects, to invest in upgrading the energy grid, reforestation projects, carbon offsets. In this context of recovery, of digitization, of innovation, of decarbonization, BBVA is uniquely positioned to capture growth opportunities.
That's all because of our strengths, which set us apart from our competitors. Let me quickly walk you through some of them. First, our banks are the leading franchises in their markets. They're in the top positions. They have double-digit market shares, even close to or surpassing 20%. In every case, as you can see on the right-hand side of the page, we consistently obtain higher returns than our peers in each market, highlighting the strength of our operations. Our return on equities are always several percentage points above the industry. Second, we're pioneers. We're always at the forefront of our industry, leading the change, leveraging technology, innovation, disruption. This has been a hallmark of BBVA in its 165-year history. A good example of it is our digital leadership, which we have leveraged to transform our business in a significant way.
We have been digital experience leader five years in a row with our repeatedly rewarded mobile app. In this period, as you can see on the left, our digital sales have increased from 25% to 72% of total sales. New customers acquired through digital channels have almost doubled. In the past two years only, they have actually grown 91%, and they already represent almost 40% of all of our new customers. We're also at the front line of the industry in sustainability. BBVA has again been recognized this year as the most sustainable bank in Europe and the second most sustainable bank in the world by the Dow Jones Sustainability Index. We recently doubled our target of sustainable finance with the goal to achieve EUR 200 billion by 2025. We are already carbon neutral in the direct impact of our activities.
That's since last year. We have committed to net-zero by 2050, meaning we will decarbonize our portfolio. Being pioneers is part of our unique strengths in which we anchor our success. It's our differential culture and mindset. We are motivated by our purpose here in the bottom of the slide to bring the age of opportunity to everyone. We're driven by values. For us, our customers come first. We strive to meet their needs, to make them succeed, to create opportunities, always with empathy and integrity. We think big, not only ambitious in our goals, but also breaking the mold, being innovative, looking to surprise, to amaze. We are one team across our footprint. We trust each other. We are committed. We are BBVA. This sense of common purpose and values, this trust and ownership, has underpinned our deployment of agile organization dynamics.
Over 30,000 teammates are organized and working under this methodology, creating more powerful products and services for our clients in a faster and more efficient way, and also better aligned with overall strategic goals. A more agile team is a more engaged, more productive one. Testament to this is our annual engagement study, in which BBVA's engagement score improved by 14 basis points from what was already a good score, outpacing clearly the average improvement of all the companies within the Gallup universe and the financial sector. Moving to financial metrics, our unique portfolio of franchises has recurrently resulted in very strong overall performance, well above our competitors. Over the last five years, our pre-provision profit as a percentage of risk-weighted assets has been consistently above our peers, 3.5% on average since 2016 versus 2.5% of competitors.
Similarly, in efficiency, our cost-to-income ratio is the best among our peer group. It currently stands at 45%. It's come down from 52%. This flows into our bottom line, where again we outperform. Since 2016, we have delivered an average return on tangible equity of 9.3%. That includes the negative effect of COVID last year, of course, and it's clearly above the 4.9% of our peers. Now, beyond operating performance, we have also been focused on creating value through our capital allocation decisions. We have actively managed our portfolio, investing in some markets, divesting others. Now, looking at the chart here on the left, you might think that we divest in countries in which the colors of the flag are red, white, and blue, but that's far from it.
The chart actually plots the various franchises' market shares and profitability levels. As you can see, we'll divest in smaller markets like Puerto Rico, Panama, Paraguay, also those in which we do not have sufficient scale to generate appropriate returns, like in Chile or the U.S. These divestments, like the most recent sale of the U.S., have come at very attractive multiples, providing us with ample strategic optionality to return capital to shareholders and to invest in our core markets, those on the top right. Earlier this week, we announced the voluntary takeover bid to acquire the minorities in Garanti BBVA, a very attractive financial transaction with very limited impact on capital, strong returns, even with very conservative macro and currency hypothesis, and which is immediately accretive, both in earnings per share, 13.7% increase, and tangible book value per share, 2.3% increase.
As a result of our performance and our capital decisions, we have seen good returns to shareholders. BBVA's total shareholder return has been 51% since January 2019, compared with 24% for the STOXX Europe 600 Banks, and compared to a decrease of 7% for the rest of the Spanish banks. This disciplined approach to capital management has also allowed us to generate a significant surplus of regulatory capital over our requirement and our management target. Indeed, as you can see, our last reported core capital ratio is well above the minimum. Actually, the reported was 14.48%, and the P2R is 8.6%, and it's also well above the 12% upper part of our target range.
The chart here, looking at the waterfall, what you can see is how we are deploying a significant portion of that excess. The bar at the left, 1473, is our pro forma ratio as of September 2021. First, 25 basis points have been invested in the restructuring plan in Spain, which was already deducted in our last reported ratio that I just mentioned, the 1448, 25 to invest in Spain in restructuring. Second, dedicated 130 basis points to the EUR 3.5 billion share buyback, which is already approved. Third, we are investing up to 46 basis points on the voluntary takeover bid for the remaining shares of Garanti BBVA.
After these uses of capital, our pro forma core equity tier one would stand at 12.72% as of September of this year. As you can see, it's still well above our target of 11.5%-12%. We will continue to deploy this excess with shareholder value as the guiding principle, with the intention of operating with no buffer over our target range. In this vein, today we're making another important announcement. We have raised our policy for distributions to shareholders to a payout ratio between 40%-50% of our net attributable profit through dividends, cash dividends, an interim dividend, and a final complementary dividend, which could be combined as well with further share buybacks, depending on circumstances. Separate from this policy, we have the EUR 3.5 billion share buyback program already approved by the ECB.
We will start executing this program, a first tranche, for an amount of EUR 1.5 billion early next week. It will be executed by an external third party. It will not be subject to any price limits, and we expect it to be completed within the next three or four months. To sum up, BBVA is uniquely positioned to leverage the recovery in this age of opportunity because, one, w e own leading franchises in very attractive markets. Two, we're trendsetters in digital sustainability. Three, we are a team with a purpose, with a differential culture and mindset. Four, we have a proven track record of solid financial returns. Five,, we actively reallocate capital based on value.
Finally, we have excess capital that we can deploy and will deploy to grow in our core markets and to return to our shareholders. Based on these core strengths, we have set very ambitious long-term goals. First, on efficiency. We are already the best among our peers. Number one, with 44.7% cost-to-income ratio. See how far away from that average here on the left. While we want to drive it further to 42% in 2024. On profitability, we're also better than peers with 11.7% return on tangible equity year to date versus the 9.5. Our goal is to take it to 14% by 2024.
On how that return translates into shareholder value, while it's hard to forecast the share price, so instead, we have set an ambitious goal of growing our tangible book value per share plus dividends at a 9% annual rate from 2021 to 2024, and I repeat this, at annual rate of increase. We also plan to increase our target customer base, our target customers, by 10 million in 2024. That's 2.5 million more than in the last three years. Finally, we remain committed to mobilizing EUR 200 billion in sustainable finance by 2025. These are our ambitious goals. Let me repeat them quickly.
By 2024, an impressive 42% cost-to-income ratio, 14% return on tangible equity, tangible book value per share growing at a 9% annual rate, 10 million new target customers, and EUR 200 billion in sustainable finance. This one is to 2025, which is our pledge. Apart from these, we maintain our core equity tier one target in the range of 11.5%-12%, and we remain committed to operate with no buffer over this range. How will we achieve this? Well, hopefully we'll shed some light over the course of the day, starting with Onur, our CEO, who will lay it out now. Onur?
Thank you, Carlos. Welcome, everyone, and thank you for joining BBVA's 2021 Investor Day. In this section of the presentation, I'm gonna walk you through our strategy and shed some light on how we plan to achieve our goals that Carlos has just laid out. In the rest of this afternoon, again, as Carlos mentioned, we will have deep dive sessions with some of our core business units, during which we will further detail our plans. Let me start. We are crystallizing our strategy in six clear strategic priorities as laid out in this page. Six priorities structured under three themes. The first theme on the left-hand side of the page: How are we gonna differentiate ourselves versus competition?
We will do that by improving our clients' financial health through digital and through our people, and by advising our clients in their transition to a sustainable future, one of the most disruptive trends mankind has ever seen, as explained by Carlos. Second theme, in the middle: How are we going to deliver superior performance to our stakeholders? This is going to be achieved by reaching more customers, by growing our franchise, and doing that with operational excellence in such a way that we are cost and capital efficient while managing our financial and non-financial risks properly. The third theme, on the right-hand side, it's around accelerators. It's around enablers to make everything else come to life. We are in the people business. We keep saying it in the bank. We are in the people business.
As such, we will focus and invest on our people, and we will use data and technology as the main catalysts of our innovation. We believe the spotless execution of the six strategic priorities will make us, number one, a larger and a more profitable bank. Number two, a distinctive bank, a different bank for our clients, based on a unique world value proposition, and it will help us continue leading efficiency through operational excellence. Our long-term goals, although they might have seemed a bit aggressive among our peers, might have seemed quite ambitious to you, we believe this described bank will get there. I cannot be very exhaustive given the time constraints, but allow me to elaborate on some of the critical components of our strategy.
On the larger and more profitable bank, basically three main levers: boosting new customer acquisition, over-delivering on growth in attractive value pockets, as we call them, and investing in disruption. Starting with our first growth lever, this is the page that I like the most. New customer acquisition in the open market. Customer acquisition is a key goal for us, based on a conviction that scale is a competitive advantage in our traditional banking business. Our business is evolving. It is evolving in such a way that fixed costs, they represent a higher percentage of total expenses now. In the digital environment, we are developing new software, new products, new functionalities, they are key, and this creates a higher fixed cost base, and it creates an inherent advantage for larger players as they can generate more revenues with the same cost base.
Growing the franchise is very important. In 2021, we expect to close the year having acquired over 8 million gross new clients, an all-time record. The share of those acquired through digital channels is consistently increasing. As you can see in the graph, we have increased digital acquisition from 3.7% in 2016 to an impressive 40% in 2021. That's more than 3.3 million new clients in the year acquired through digital channels. We will continue acquiring new customers through our own channels with end-to-end digital sales capabilities and/or embedding our financial solutions in our partners' ecosystems to have a broader reach to non-customers through APIs. Growth, the first thing is new customer acquisition. Then the second growth lever on page 29, let me see, start on this one with our conviction first, maybe.
Our banking business is the combination of distinct businesses with different return and growth profiles, and we have to optimize our capital investing in the right areas. As such, given this conviction, we will deliver over proportional growth in certain high-value verticals and segments. What are those areas? First, on the left-hand side at the top, payments, both in issuing and acquiring. For example, in acquiring, Openpay is becoming the one-stop shop for merchants in Latin America. Openpay, originally a Mexican fintech that we acquired, is growing very fast in Mexico, already expanded its operations to Colombia and Peru, and will be adding Argentina before year-end. Second, SMEs. This is a high return, but typically an underserved segment.
Our objective is to reach and pass our fair share, fair market share in this segment, offering a complete coverage, obviously leveraging our physical capillarity, but also digital onboarding, digital solutions as well. Third, at the bottom on the left-hand side, asset management. Building on our footprint to offer a global value proposition to our private banking clients, and further focusing on the distribution of asset management products to the affluent and even mass affluent segments, especially in Spain and Mexico. Fourth, insurance, again at the bottom on the right, by offering digital and contextualized sales, and once again, using our physical distribution power to sell leading third-party products. Also on slide 30, corporate and investment banking. It has a great upside within BBVA in our view.
As you can see on the left-hand side of the slide, today, our corporate investment banking division contributes 15% of the growth group's revenues. This share has increased over the past years, but there is still a significant growth potential compared to our European peers. We will increase the contribution of the CIB business to the group by doing a few things on the right-hand side of the page, by turning our global and emerging market presence into a competitive advantage, by further strengthening our industry advisory capabilities and by leading the pack in sustainability. Obviously, a major topic to tackle for all of our corporate clients. As you can see on the right-hand side of the page, we are progressing very well in all of these CIB priorities.
As shown, we are achieving growth without compromising on profitability, delivering 16% return on capital. Now, our third conviction around growth. All businesses, including ours, including banking, are gradually being disrupted by technologically focused players. This conviction should have an impact on our own portfolio strategy as well as on our service to our clients. What does this mean tangibly, as I love the word tangibly? Let me be more specific. On the left-hand side of the slide, first, this means universal digital bank investments for us in new and attractive markets. We have recently launched our first fully digital retail bank in Italy, built on our own Spanish infrastructure and our award-winning best European mobile banking app.
Also, we have entered new markets through direct equity investments like the digital bank Atom Bank in the U.K. and Solarisbank in Europe. You might be asking, how do these investments, establishing small-scale digital banks, relate to our aforementioned conviction that our traditional banking business is a scale business? I said that like two slides ago. Well, scale is needed for cost competitiveness in our core markets. Obviously, our starting point in those markets is very different, and we serve all the segments. These digital banks, they come with a completely different and competitive cost structure, and they serve specific segments. They are very much aligned, actually, on cost competitiveness, and they are complementary. The other question might come around and say, why don't we do more of this then? We might. We might do more of these digital banks.
As the conviction says, in the conviction, there is one particular word, the change is gradual, which then implies that we have to be selective and purposeful in picking the right markets, seeing the success signals of the future, and then making sure that we get the return from the capital invested. What else does this conviction imply? In the middle of the page, other fintech investments through venture capital vehicles like Propel and Sinovation. Propel is an independently managed fund based in San Francisco, a vehicle to invest, but more importantly or as importantly, to learn from fintech, invest in fintech and learn from them. It has invested in over 40 companies, six of which have achieved unicorn status already and two successfully IPOed, Coinbase and DocuSign.
It is important to note that we have already registered around EUR 300 million in pre-tax income from Propel in the first nine months of this year in our P&L accounts. Also worth the mention, Sinovation. Sinovation is a leading venture capital firm focusing on developing the next generation of AI-based Chinese high-tech companies. Finally, on the right-hand side of the page, we should also be ready to bank the companies of the future, the ones that are shaping the mega-trends that Carlos has explained under this umbrella of innovation banking. Moving now to how BBVA will continue being a distinctive bank for our clients, the second subchapter here. How are we gonna differentiate ourselves? What is our unique value proposition? Two topics to highlight, next level of financial advice and sustainability.
My colleagues, David Puente and Javier Rodríguez Soler, they will deep dive into these later on, but an introductory perspective from my side. On slide number 33, on the next level of financial advice, it will obviously, the advice will start with our people. We are in the process of improving our skills and capabilities so that our team of 115,000 people all around the world serve this need first and foremost. People will always be there in the advice topic. We will also take digitalization one step further to scale up our financial advisory capacity. Again, tangibly, what does this mean? As you know, at BBVA, digitalization has been at the core of our strategy for many years now. We can summarize our digital transformation in four different phases.
These phases are a bit interrelated, so it's not precisely a straight flow, but from left to right on the chart, going from less difficult to more difficult, we are digitizing four different things in the bank. Let me start from the left. We first started by making servicing, like sending money from one account to another, available for our clients through digital channels. Second in the flow, we accelerated digital sales. For example, getting a loan, getting a credit card as a BBVA customer from your app with one click. That was sales. In the first nine months of 2021, again, seven out of ten sales that we do, it is done digitally at the group level. It was two out of ten in 2016.
On these first two, servicing and sales, we are seeing numbers much, much better than the rest of the industry, so we are very happy. Other players, they're catching up, so we have to find ways to better set us apart from the competition. This brings us to the third phase of our digital journey. Once we manage to serve and sell digitally, the big challenge is. How can we grow our client base? One form of sales, again, but a much more difficult one. As I mentioned before, new customers, and also Carlos mentioned this initially, new customers acquired digitally already represent around 40% of total customers at BBVA. An amazing figure, also competitively speaking. Most importantly, the phase IV.
We have been designing different digital journeys in the app which provide proactive advice to our clients through alerts, through automated rules, through personalized recommendations, so that our clients, they can say, "BBVA knows me. They offer me meaningful advice, so I can manage my money. I can improve my financial health." Regarding these last two, new customer acquisition and especially advice through digital, they are not easy to achieve. They require a mastery of data and technology, and that's why they can be differential versus competition. We believe we are leading the change here in the industry as well, but at the same time, we should confess that we have a lot to learn on these topics. Moving to our second differentiation lever on slide 34, it's sustainability.
As mentioned, we discussed it a few times already, but decarbonization is without a doubt the biggest trend mankind has ever seen. It's obviously a major risk to be managed, but at the same time, we also see it as a great business opportunity of renewable, of investments for our clients. Hence, it's an opportunity for us as well. Sustainability is a key growth lever that we are already pulling, as shown on the left-hand side of the page. As of today, 12% of the group's new business origination is sustainability-linked. What is even more remarkable in my view is approximately 20% of this growth is incremental business, driven by our differential sustainable products offering, which you can see in the middle of the page, and which Javier is gonna talk to us more about in the rest of the day.
We believe this differential product offering, coupled with our advisory capacity for our clients, will create a competitive advantage. Why is this advisory needed? Because all of our clients, they would need to transition, and they would need expertise, investments, financing to achieve that. We aim to accompany them in this process like no other. As you might have seen, as part of our Net-Zero 2050 commitment, we are one of the very first banks to announce our decarbonization targets in CO2-intensive industries, power, auto, cement, steel, and coal. They account for 60% of global CO2 emissions. We are gonna be putting these goals on the table, and these goals can only be achieved by helping our clients with financing, with advice, and with innovative solutions.
Final objective in the chart is to continue leading efficiency in the industry, driving operational excellence through the transformation of our relationship and distribution model. Our focus on operational excellence, though, is not only about pure cost efficiency. It also includes managing risks, both financial and non-financial, and it also includes having a disciplined capital allocation process. Let me walk you through the two of them very quickly. On this page, you can see how we are transforming our relationship and distribution model to support growth with a significantly lower cost to serve and sell. Again, we will talk more about this later in the day. As mentioned, one of the most profound transformation that our sector is going through is customers move to digital.
As you can see in the graph on the left-hand side of the slide, digital customer transactions have more than doubled in the past three years, while branch transactions have decreased substantially. We are adapting our relationship and distribution model to this. This implies either serving more customers, delivering more growth and income with the same cost structure as is typically the case in emerging markets or adjusting the cost structure when there is less growth, in both cases, having a direct impact on our cost-to-income, but also having a direct impact on productivity.
On the right-hand side of the page, two examples to describe this productivity improvement. We expect to increase the customers per branch by 42% in 2021 versus only two years ago, and the value of sales per network FTE is expected to increase by 21%, and these trends are here to stay. In the next slide, on slide 37, you can see another side of operational excellence around how we allocate our capital to clients. Leaving the details aside, it's a complicated chart, but very basically what this page is showing, for every single commercial and corporate loan granted at BBVA, which obviously consumes capital, the transaction has to pass a certain capital return threshold.
As the relationship manager, you can invest in a client by exception if you are below the threshold, but then over time, you have to serve that client well, and through cross-sell, you take that client out of that exception pool. What you see on this page on the right-hand side is a real example of how we improve returns for low profitability clients, having them exit this exception pool with time. This micro capital planning approach with the linkage to our pricing systems enables growth, but only, and I repeat this one, only if it's profitable. As I mentioned at the beginning of the presentation, none of this would be possible without our people. We are evolving our organization and our talent to achieve all that I have mentioned.
We have set focus on growing and reskilling our people to develop key capabilities, and you can see that on this page. For example, as you can see on the left-hand side, since 2017, we have grown 11 times the specialized FTEs designated to data science and analytics, almost reaching 1,800 people in 2021. On the right-hand side, you can also see how we are changing the way we work and how we are transitioning to an agile organization with tangible impacts. I'm repeating tangible for the fourth time, but it's important. Tangible impacts on time to market and productivity. Now, moving to the last part of my presentation. Very quickly, I will be sharing how the country's strategies are designed to accelerate profitable growth. Our country managers are all here, Spain, Mexico and Turkey.
They will further elaborate on their respective strategies. Very quickly, on slide 40, as Carlos already mentioned, we have strong and leading franchises with great competitive positions to start with, and this will allow us to deliver differential results. More important, I think, in this page is that position, that strong position, has been improving across the board lately. As you can see on the page, our market share in terms of core revenues is increasing in all of our markets. Great starting point. On that positive backdrop, in this slide you can see the evolution of risk-weighted assets in our core markets. The map basically highlights that our disciplined capital approach to organic growth even holds at the macro, at the country level.
Going forward, we will continue to allocate more capital to high-return businesses and have defined clear plans, clear strategies in each country to accelerate our profitable growth strategy. What are those? In Spain, very quickly again, we will talk more about them later today. We plan to allocate our capital towards the most profitable segments, consumer, SMEs, commercial banking, while continuing to focus on fee-generating products. In Mexico, we will continue to invest and grow, reinforcing our leadership position by increasing our customer base. In Turkey, we aim to continue being the best bank in the country in terms of return on equity. Growth will continue to come from local currency portfolios. In Peru, our focus is on growing the retail franchise even more, leveraging the payroll product and payroll system, payroll growth. Lastly, in Colombia, we are seeking to gain scale across the board.
We want to gain even more market share overall, but particular focus on the wholesale banking segment. This will translate into ambitious goals for the countries as well. We have set goals for three key metrics by country, revenue growth, cost-to-income, and cost of risk. For the sake of time, it will be better to discuss them in the respective country discussions later this afternoon. But as you can observe, in general, we are planning to clearly improve on our key financial metrics across the board. For the areas that will not be covered this afternoon, in our South American unit, with the macro catch-up after COVID, our goal is to clearly accelerate revenue growth to mid-teens and continue to improve on efficiency. Regarding the corporate center, expenses will continue to decrease in the period.
Through the bottom-up country goals and the strategies I have outlined, we are clearly determined to deliver the group-wide long-term goals announced by Carlos and repeated on this page. The reason that we repeated this page is the little message at the bottom. I would like to highlight that management incentives are fully aligned with these long-term goals. In one form or another, our KPIs are totally included in the incentives grid of all the employees in the group. Let me finish the whole thing by highlighting the key takeaways. First, BBVA, in our view, is uniquely positioned to accelerate profitable growth. Second, we will execute our strategic plan to become a larger and more profitable bank, a distinctive bank for our clients, and we will continue leading efficiency through operational excellence.
Finally, we have set ambitious long-term goals to accelerate profitable growth and deliver differential value for our shareholders. Now, I go back to Patricia to conduct the Q&A session. Thank you for listening.
Thank you very much, Carlos and Onur. We are ready now to move into the Q&A session to answer the questions from the audience. Let me remind market participants that in order to send questions, you need to exit full screen and type your question in the box at the bottom of the screen. I will then convey them to the speakers. Your participation is highly appreciated. Now, the first question comes from Francisco Riquel from Alantra, Andrea Filtri from Mediobanca, Stefan Nedialkov from Citi, Marta Sánchez from Bank of America, Ignacio Ulargui from Exane, Carlos Peixoto from CaixaBank are asking about excess capital. Specifically, they are interested in understanding how much capital we expect to generate organically, and which will be the priorities to allocate the marginal euro of capital from now on.
Will we continue buying Garanti shares in the market if the take-up is below 100%?
Thank you, Patricia. I think both Onur and I referred in the presentation to how we think about deploying that excess capital. It is the same way we have been thinking about it in the past. I have that chart where you could see that we have been investing in our core markets, we have been divesting markets where we didn't have enough scale or market share or profitability levels. The way we think about deployment is for every transaction in terms of M&A or in terms of organic growth, it has to add value for our shareholders. We view it quite in isolation from the fact that we do have that excess capital or not. That's certainly true when we apply M&A, and we will continue to follow that same approach.
In short, the excess capital will be deployed both in growth and in return to shareholders, as we have done with the increased payout policy that we announced today and with the EUR 3.5 billion share buyback. Minorities in Garanti, well, it depends what the take-up is. The beauty of that transaction or that offer is also that we are pleased with 100% take-up. We are also pleased if we are below that, because once we cross the 50% threshold, we have the optionality to continue to invest, buying more shares in the market. It will depend on the price of the shares at every point in time. Again, it's purely a financial transaction, so we don't have any other reason to buy but value.
If we see value in the stock, then it will make sense. As you know, this initial purchase that we would make, actually for every share we buy, we reduce the inefficiency in capital that we have today because of the treatment of minorities. That's also factored in when we run the numbers, of course. The criteria is value in terms of the return to our capital of every transaction.
Thank you. Thank you, Carlos. Next question comes from Fernando Gil de Santibañez from Barclays, ask about the possibility of the bank buying the minorities in Peru or other Latin regions.
I would answer the same. Same disciplined value approach that I just commented regarding Turkey. Incidentally, maybe you wanna comment on the excess capital, Onur, on the generation going forward. Because I alluded to how we think about deploying what we have, over the course of the plan, there'll be also additional capital generation.
Yeah. I mean, our expectation for the planning period, I mean, the next three years, we do expect to generate EUR 1 billion-EUR 1.5 billion every year excess capital. Excess capital meaning after deducting the supervisory or regulatory impacts. As you know, Basel is gonna be coming in in this timeframe. We factored that one in. We put an average market impact, and obviously the market impact can vary from one year to another, but we factored in that our RWA's growth. When you deduct them all, what is the remaining part? It's EUR 1 billion-EUR 1.5 billion every year. This is also unique across our peer group.
When we look into our peer group, given our ROTE of, again, we are putting a goal of 14% today, we are also one of the very few banks who can create this healthily this much organic capital every year. That will be coming obviously on top of what we already have. 1%-1.5% is the number that we have in our spreadsheets.
Thank you, Carlos and Onur. Alvaro Serrano from Morgan Stanley ask about the takeover bid in Turkey. The concern is that you are throwing good money after bad money. Can you reassure the main objective of the offer is to be above 50% stake and give Garanti the optionality to do buybacks locally? If that's the strategy, ultimately, you are investing Turkish capital to buy Turkish share.
Well, I think I already answered part of that when I mentioned that we're pleased with 100% take-up. We see a lot of value. This is a financial transaction in which we see a lot of value. At the current prices, given our idea of how Garanti is going to perform, taking into account also the inefficiency, which is a very relevant added bonus, the returns on the capital we invest are the marginal returns on this marginal investment. Not looking at the past, we're looking at the decision we're making now, we would be pleased to buy 100%. We're also pleased if we don't get there, because then we have that optionality which has value.
Aside from the returns of the deal itself or the purchase of the shares themselves, and the return is really nice, as I said earlier, including very conservative macro, very conservative FX hypothesis. The impact on the group is very strong in terms of accretion, immediate value also for our shareholders in terms of the accretion, earnings per share, dividend per share, et cetera. Really nothing more than that. It's a financial transaction. Strategically, we already incorporated it in our group, we already consolidated, and it's part of our consolidated metrics in every respect.
Thank you. On the same topic, Carlos Cobo from Société G enerale asks about the regulators' initial impression regarding the decision to grow in Turkey.
Okay. We have to go through the motions, but both in Turkey and in Europe, there's no objections to proceed, so that's as much as we know now. Really, we proceeded because there were no objections, and now we have to run through the formal approval process.
Well, it's a process obviously, and as we said at the announcement, we expect to close in the first quarter 2022. There's the timeframe that should be kept in mind.
Fine. We have received a lot of questions on our return on tangible equity, specifically Francisco Riquel from Alantra and Marta Sánchez from Bank of America asks, "What stake in Garanti have we assumed to build our midterm, sorry, return on tangible equity target?" Benjamin Toms from RBC asks together with Daragh Quinn from KBW if our return on tangible equity target is pre or post AT1 coupons. Maxence Le Chineur from Deutsche Bank, Sofie Peterzens from JPM organ, and Britta Schmidt from Autonomous Research ask about the kind of CET1 levels that we assume in our 14% return on tangible equity guidance.
Do you wanna take that one, Onur?
Yeah, I mean, on the 14% ROTE target is Garanti included. Everything is included. We are committing here to a goal that the levers underneath might change. We all have a clear business plan and clear list of initiatives and strategies to be able to get there, but we are not conditioning these numbers to this or that. In that sense, when we developed the 14 ROTE target, Garanti was not fully there, so it could be other things, it could be Garanti, and so on. So I would not correlate them. I would actually decouple them. What I can tell you is that the ROTE target includes all, includes now Garanti, but it could not have included, it might not have included. Everything included, we are committing to this 14 ROTE target.
There's a very specific question about pre or post AT1 coupons. AT1 coupons are not included in this calculation. What is the assumed CET1 ratio? We have a target range, as you know, 11.5%-12%. In this calculation, we assume that there is no surplus excess capital, and we assume 12%, the upper end of our range, as the basis for these calculations.
Thank you. One of the already mentioned analysts asked if we would interrupt the program, the share buyback program, I mean, if the share prices exceed 1x tangible book value per share.
No. We would not. As I said earlier, the first tranche of EUR 1.5 billion that we will immediately start executing next week has no price limit. We will not be stopping for price considerations.
It will be delegated to a third party, and then the third party has no price limit, so it's all under control.
Exactly.
Thank you. We have a question from Britta Schmidt, as well as from some of the already mentioned analysts about regulatory impacts on capital, specifically the estimated impact from the oncoming Basel IV, and if there is any other impact to bear in mind.
Onur?
Well, there are two things that we put into this calculation. Two. One of them is Basel IV, III, IV, however you wanna call it. As you know, the new date is 2025, but we did include this in this plan. We discussed it many times before in our quarterly calls as well. We do expect one of the lowest impacts from Basel IV, given the fact that we are not gonna be affected from output floor. As you all know, our RWA density is the best in Europe, one of the best in Europe. Our RWA density at the end of third quarter was around 47-48%. The average is around 30%, the average of the European banking system. Given that, we will not be affected from output floor.
Given the fact that the output floor is not there, our expectation, and Britta, you have been asking this every quarter, so let me put it on the table now. Our expectation as it stands, and this can change, so don't quote me on this in this sense later on, but 30-40 basis points is gonna be the impact from Basel IV, and we have already incorporated that into this plan. Beyond that, the only other thing that is included and that will be affecting us in 2022, the EBA guidelines on PD/LGD. We have already incorporated PD, but the LGD impact is gonna be arriving in 2022. So for that one, we have incorporated 15 basis points.
15 plus the 35, the 50 basis points regulatory impact already included in this planning exercise.
Thank you. Alfredo Alonso from Deutsche Bank and several other analysts ask about developed versus emerging market, the mix of the group. Are you comfortable with it? Looking to increase the weight of developed markets in the group? How? What is, in your view, the ideal mix in terms of earning our balance sheet?
To the question whether we're satisfied with the current distribution, yes, it is roughly quite well divided between emerging and developed markets in terms of capital and assets. In fact, it's about two-thirds of the assets are in the developed markets versus one-third in emerging. It's more equalized, fifty-fifty almost, when you look at capital deployed or risk-weighted assets. It's the other way around, two-thirds, one-third, emerging, developed, when you look at the net attributable profit. That's a result of the fact that in those emerging markets, we have higher profitability levels.
The cost of capital is higher, so it makes sense. The fact that in the developed markets, we have been, for the past few years, as you all know, in an environment which has been hard for returns. Hopefully, as that normalizes, we'll hear from Peio later, and you will get an overview of what we can expect in Spain, for example. There will be a natural increase in the weight of the earnings. Roughly speaking, we're satisfied where we are. We look at the M&A as I was saying earlier, on their own merits, and we would not be doing M&A just to rebalance the portfolio from where we are, because we're satisfied with what we have.
Thank you very much. Carlos Peixoto from CaixaBank asked the following: Do you see the possibility of resuming merger talks with Sabadell or a merger with another Spanish player? What geographies could be of interest for BBVA to expand into? Would you consider an acquisition in Portugal, where there are assets likely to be up for sale and/or trading at depressed valuations?
Well, as always, I already mentioned this twice, I think, and Onur said it as well. The inorganic growth opportunities, we analyze them each and every one of them as they come. It's very hard to answer any of these questions. Regarding Sabadell, you know very well that we had talks because we announced them. Then we stopped because we didn't reach an agreement on the economic terms, and that's what I can say. Who knows what the future will bring? We have seen a consolidation in the Spanish market. There's been a couple of transactions. We have also seen how players have carried out their own restructuring plans, Santander, Sabadell, others, CaixaBank, ourselves.
Maybe the likelihood of consolidation in this round might be less, but it's hard to say when there will be further consolidation. Similarly for other markets, we would look at opportunities on their own if they make sense. We now have this digital option to go and grow. Let's see how the Italy digital bank performs. What we learn from there, we can serve our clients, satisfy our clients, and we can take it from there as another route of growth into new markets without doing M&A.
Thank you very much. Benjamin Toms from RBC asks, "You describe your targets as ambitious. Does this imply a high risk that they may not be achieved?
Onur?
They are ambitious, but we are committed to them. Very simple answer. No, I mean, we are gonna put them, as I said, into our incentives, our thinking, and we will do everything that we can to get there. We are not putting them as like numbers. No, they are. We have been having this planning, and you are very much involved in this, Patricia, from the first day for months. Very detailed strategic initiatives and levers to be able to get there. We feel very comfortable that we can get there, and we are very committed to them. Obviously, there are uncertainties in the market, but the commitment is fully there. Let me be more specific.
Thank you. Mario Ropero from Bestinver, Alvaro Serrano from Morgan Stanley, and Marta Sánchez from Bank of America ask about the FX exchange rates embedded in our 2024 targets. Can we share the expectation for Turkish lira, given the currency is down 5% today alone?
Onur.
Well, the assumption is the forward curve. If you go to Bloomberg and you put any currency, you will get a curve, and that curve is the curve. The 5% of Turkish lira today, for sure. I think if I'm not mistaken, more or less the forward was assuming more or less around 20% annual devaluation of Turkish lira for the next four years in these numbers as well.
Mm-hmm.
The forward curve, again, very simple answer.
Thank you. The same two analysts are also asking about the cost-cutting plans for the corporate center.
On that one, we have a very clear commitment. I think it was in my section. It says, "Corporate center expenses will continue to decline." I will be there. I will stay there, and we will achieve that by multiple levers. At the moment, we are not planning any area or the center if that's the question being asked, but we will continue to decline the expenses, decrease the expenses in the corporate center.
Thank you. Ignacio Ulargui from Exane asks how concerned you are with the recent development in Turkey and how the Turkish lira is performing after the central bank decisions to cut rates.
Well, we as we mentioned on Monday's call, we are long-term investors in the country. We view the country with strong factors that will drive long-term growth, but certainly with short-term weakness, short-term vulnerability, and today is a good example of that we were already mentioning on Monday as well. It's not that we're making this investment without being aware of where Turkey stands and the challenges it has. We've been an investor there for more than a decade. We manage and own the best private bank in the country with a very high market share, and we have quite good understanding of that dynamic.
Today's news have to do with the policy decisions by the central bank and then the ensuing selling of lira, which is creating that pressure. As Onur said, we already incorporated in our projections. Certainly for the acquisition itself, it's a lira-denominated acquisition, so everything in that sense settles. Of course, it does have an impact on our tangible book of our prior investment. We have had similar episodes in the past, even much more dramatic devaluations. The way we view it, we see an overreaction in our stock when there is bad news flow. Understandable from the news flow point of view, the hedge fund point of view, but again, if you look then at the resilience of the returns that Garanti provides, it comes back up later.
We are looking at it with attentively, but also not overreacting to short-term news that, you know, the fact that the central bank was gonna cut rates today was very well in advance factored in, or at least everybody was expecting it. Onur, I don't know if you wanna add anything on the situation.
No. No, that's basically what you said.
Yeah.
Thank you. Ignacio Ulargui from Exane asks if the new distribution policy is applicable from 2021 results or from 2022, and could you please elaborate on the split between the cash dividend and the share buyback? Could you please confirm that the cash payout ratio will be not below the 35%-40% overall cash payout ratio policy?
Well, we're changing the policy, so it's no longer 35-40. It becomes a cash policy of 40-50, and that's immediate effect. How that will be distributed, we will have dividends. We will have two dividends. An initial dividend as we always do around October, and then the complementary dividend when we close the accounts and we have our AGM. We might or might not have a mix of share buybacks in the payout package within that 40%-50% cash dividend. Yeah.
Okay. Thank you. Gonzalo López from Redburn asks, why not targeting a more ambitious cost-to-income target in line with long-term ambition of 40%?
In three years. Onur.
I think we should have Gonzalo López.
I like that. I like that.
Yeah. We should have Gonzalo López join us in the bank, and be part of this aggressive goal that he's outlining. I don't know, Gonzalo López. I mean, Carlos has shared that the European average is 62.3%, and we are the number one already in the European peer group, the largest 15 banks in Europe. So 42 is quite aggressive in that sense. We also obviously compared our goals with the goals outlined by our peers. It's also the most aggressive goal out there. You might be thinking, well, it's affected by the mix of our countries, mix of our businesses. So our businesses, some of our businesses actually, they come with very low cost-to-income. So the mix effect is overriding here.
42 is again, with even that mix discussion, isolating for that mix, a quite aggressive figure in our view. As you have also seen in some of the geographies, like in Spain, we are putting less than 45%, which is a quite aggressive goal as well. In many other geographies, better than where we are currently. To cut long story short, I do think that 42% is quite aggressive, but we'll try to beat that goal, Gonzalo.
Thank you, Onur. Hadia from Allianz asks if we have factored in additional capital requirements from Garanti acquisition.
No. No, the risk profile of the group doesn't change at all with this acquisition. We're already consolidating Garanti, so all risk-weighted assets, liquidity management, recovery plans, everything remains as it is. There's zero change. The only change is really that we will, if we buy the shares, be incorporating that net profit instead of that being owned by the minority. Again, it's a financial transaction. We're buying shares that will lead to more net profit, but doesn't change the group. It's a very limited impact on capital. It's EUR 1.4 billion max, which is less than 3.5% of the group's capital base. It will hardly change our risk profile in any measurable way.
Carlos, I would add on this one, with certain periodicity, obviously, we do this asset liability committee in the bank, as you know very well. Then when we discuss the countries, then we discuss Turkey, when we do liquidity planning, when we do resolution planning, when we do risk appetite framework for different risks and so on, today in the bank, before the takeover bid, we do the full 100%. We fully control and consolidate Turkey. I would underline this. We already fully control and consolidate Garanti BBVA. In that sense, our management team or our frameworks already incorporates 100% of what we have in Turkey. Given that, I would also highlight the reaction of the fixed income market to the transaction news.
The fixed income market has taken it in a very calm way, let me say it that way, because they know that the risk profile of the group also doesn't change. In that sense, I would once again highlight the notion that it's the same entity that we had for the controlling and consolidating that we will be having even after this takeover. The only change is this additional equity and the additional profits that we would be generating from that additional equity.
Thank you very much, both. Now, Barclays ask about what other regions in developed markets do we consider to deploy capital similarly to Italy?
Well, we have not decided, and we have to wait for. I did mention it in my section of the presentation, saying that we do believe in these digital plays. We do believe, because they come with a very different cost profile, cost structure. If you can find acceptance from customers in those markets, with that cost structure, you can have something great. But as we also said, in our business, the customer behavior doesn't change that quickly, and our customers, they don't wake up one day and they say, "I wanna change my bank today." That doesn't happen. There has to be a problem with what they are getting.
There has to be a credible offer, something else on the other side for them to do this change, because changing banks is a transition challenge also for our clients. What I'm saying is this, given the gradual change in our business towards technologically focused players, we have to see. We have to see whether we are succeeding in Italy. By the way, we launched basically a month ago. We are already exceeding our original expectations for these few weeks. We already exceeded our 2.5-month goal in a few weeks, so we are already doing really well. The first signals, they are too early. Too early, actually, but they are quite good. We have to see whether we are succeeding in Italy before we can consider other markets.
When we say we are succeeding, in this sense, we said it when we launched Italy, our criteria of success for Italy, for this year, for 2021 and 2022, is whether we have the best NPS in the market, Net Promoter Score, the customer satisfaction. That's how we define success. Not we have a business plan, and we have all the numbers of how many customers and this and that, but our success criteria as a team is, are we creating something differential, different in Italy than otherwise? If we can feel that, if we can see that in the numbers, then we will sit on the table and then consider other markets. But we don't want to commit to other markets at the moment. We have to get our capital back from these investments.
Until we see the signals of that, we will be going rather slow.
Thank you, Onur. Dirk Becker from Allianz Global Investors and several sell-side analysts ask questions about BBVA Italy. Which are the economics on the digital bank in Italy? How fast do you expect to break even? What type of scale do we need to break even? What are the growth targets? Is this a strategy you will use in other European markets? What is BBVA's edge there against incumbents? I think you have talked about this. I don't know if you want to elaborate a little bit more.
Yeah, I mean.
I think you've answered it.
Yeah.
moment now.
Yeah.
It's premature, basically.
It's too premature, but in terms of the value prop, how are we different than others? We do think that we are clearly in the sweet spot of a universal bank and a digitally focused digital bank. We are gonna be right in between, because we do think that we can get the best of each and create a compelling value proposition. What does this mean? We are gonna be coming with the pricing advantage of the digital banks. We are gonna be coming with the digital convenience and digital experience of the digital bank. We are gonna be doing this fee proposition or the pricing advantage because it's a lower cost proposition, so we are gonna be replicating what the digital players have.
We are also gonna be replicating what the incumbents, what the big universal banks have in Italy, which is the trust and the safety and the greatness of a great bank, number one, but more importantly, the ability to launch new products very quickly to the market. You might have seen it. Unlike other digital players, we are going into a new market, in the case of Italy, with credit products. A digital bank with a credit product is not that common out there, so we are coming already in the launch at the start with multiple products, and we do think that over time, we can add new products to the proposition much faster than others because we are using the Spanish infrastructure, our Spanish bank, as the basis of the platform.
I would tie it back to the comment that, you were making earlier, on the conviction we have of how scale is becoming even more important in the digital age, and this is a good example in which we can enter a new market. We can, with a marginal cost, which is based on using the same infrastructure, same operating, platform that we have here in Spain, we can compete as if we were a startup, but with a marginal cost that is, much lower. Also with the speed to be launching, as you're saying, new features, which is really the full suite that we have in Spain, we can, with a much lower marginal cost, start offering it elsewhere.
You know it very well, obviously, Carlos, but I mean, the list of all the products that we have in the launch in the Italian value offer, they have been developed in less than a year. The reason that they were developed in less than a year is because we were banking on, we were leveraging what we have already in Spain.
Thank you very much. Andrea Filtri asks again on Basel IV. Is the 30-40 basis point Basel IV impact on fully loaded basis?
It is.
It is fine. Sofie Peterzens from JPM organ asks about the starting date of the share buyback.
Yeah. Well, I already mentioned early next week we will start the first tranche, which is EUR 1.5 billion, through a third party. Given the limits on daily volume, et cetera, we're talking about 3-4 months execution, again, with no caps on price. That's it.
Now Benjie Creelan-Sandford from Jefferies asks if we can clarify the early guidance on capital generation. Do you expect to generate capital during the plan post the 40%-50% payout ratio? If so, are further extraordinary dividends still on the table?
Yes, we expect to generate excess capital. Onur, you want to say?
This is after the payout. Maybe the question.
After the payout.
It was not clear. The reason that it was 1-1.5 is because of the 40% and 50% payout. This is the excess capital generated after the payout. Again, I heard the word guidance. This is not a guidance. This is a three-year planning period, because we are factoring in a certain assumption, especially around market impact. As you know well, market impact can be fluctuating from one year to another. We have put some assumptions. After those assumptions in the planning period, in our numbers, we are seeing this 1-1.5 after the 40%-50% payout.
That's clear. Now, María Paz Ojeda from Sabadell asks if we can elaborate on currency risk management strategy.
Onur.
It's the same as we mentioned in the quarterly calls. For P&L, for the profit and loss, we do hedge 30%-50% of the expected annual results of the coming year, 30%-50%, but this is on average, and we stick to this policy. Depending on our perspective on what might be happening, we might increase this percentage. As you know well, in the case of Turkey, that percentage is 75%, so we have hedged already 75% of the expected profit of Turkey for 2021. Our regular policy is 30%-50%. For capital, we hedge 65%, typically two-thirds, 65%-70% of the excess capital that we have in the country. Because there's a natural hedge. The numerator and denominator moves. For the excess capital, we do 65%-70% hedging every year.
I think Patricia, on the prior question I missed, there was also a question as to, since we're generating excess capital with this new payout ratio, whether there might be a further buybacks. I would refer to what I already said. We want to be operating within the range of capital, 11.5%-12%, with no buffers, and we commit to be operating within that range. In order to get there, we will need to deploy the capital profitably, and we might grow more in the markets where we are. We might do more M&A if it makes sense. Not because we have the capital, but because the deals might come through that we analyze that make sense.
We might return more capital to shareholders. We're starting with this very large buyback program, and we'll be executing it, and it will all depend on circumstance. Depending on where our share price is, that will also determine the relative merits of a buyback versus other uses of that capital, more dividends or more investments.
Very clear. Thank you, Carlos. Ignacio Ulargui is asking if the increase in physical presence is considered if you think that the main lever is to gain clients in the open market digitally. If we are consider also the physical presence as a way to acquire new clients, or just we are betting for the open market digital strategy.
Well, I'm not sure I understand. If it's talking about buying M&A, traditional M&A.
I think it's branches.
branches.
Bran-branch.
Is it branches?
I think so, yeah.
So...
They are not mutually exclusive, let me say it that way. We believe in this digital path, and again, we are doing really well on that one, but there are certain segments, and our business, especially in retail banking, is about segments. There are certain segments who still would be acquired through the physical channels. The mix might continue to change. I mean, the 40% might continue to go up, but different segments and different channels for these different segments. That's what I would say. In the planning period, the growth of the digital acquisition is there, so we are assuming more percentage to come from digital, but we also foresee physical channels to contribute to the open market acquisition.
Thank you, Onur. Jacques-Henri Gaulard from Kepler Cheuvreux is saying, "The history of the last 25 years in European banking has been about a vast majority of European banks missing their planned targets for all sorts of reasons. Aren't you putting yourselves into a considerable amount of pressure with such ambitious targets, and was it indispensable?
That's a very good question.
Good question.
A very good question. Certainly, there is no guarantee that we'll meet these targets, and they are ambitious targets. We do feel, and we have run different simulations that they are achievable with good management and with good results, with performance in what we do, and that's what we commit to do, to try hard to achieve these targets. The past decade has been marked by a very particular environment with persistent low rates, negative rates even, in Europe. That together with the lack of growth has had an impact, I think, on why other banks that did put out targets were not able to meet them.
We have also heard our investors, we have heard the analysts. There was a big demand that we commit to try to reach targets and to give the market some idea as to how we view our business longer term. We decided that it was time to, with a three-year horizon, provide a set of metrics that can help all of you with interest in the BBVA project and our equity story see what we expect. This is what it is, it's what we expect that we can achieve. Certainly, it will not be easy. It needs hard work of a great team. We commit to work hard to try to make it real. Onur, I don't know if you wanna add.
I completely second what you're saying. We are very committed to them. We believe we can get there, because we have the underlying plans around them. Let's see in three years.
Thank you. Hadia from Allianz. Do you see risks from your cost base from inflation gaining traction, including in emerging markets?
Onur.
The inflation obviously has an implication on the cost, but we do also see positive impacts on the revenue side. You might have seen this in the appendix of our quarterly presentations. We put these figures, but we are, in general, asset sensitive, meaning we are positively correlated with the rates in terms of revenue. Obviously, when the rates go up too much, it might have other implications like NPL and so on. But as long as they are within a boundary, within a healthy boundary, there are also positive, quite positive actually, impacts coming from higher rates. With a good part of our loan book in most of the geographies actually, except Turkey, in all the other geographies, we are asset sensitive. Meaning when the rates again go up, our customer spread, our gross margin goes up as well.
The cost side will be affected, but our simulation, our thinking is that actually it's positive overall in the cost-to-income. If you look into cost-to-income as the key metric here, it's gonna be actually positively affected.
Thank you. María Paz Ojeda from Sabadell asks, "If there is an M&A opportunity which creates more value than the, I mean, the second tranche we haven't announced yet on the buyback, would you postpone it in order to fund the deal? Or you will maintain the share buyback and tap the market for capital if needed?
We give priority to EUR 3.5 billion that we have already announced, and we have approval for. We already deduct that amount from our capital since approval, and the plan is to execute that 3.5. Again, unless circumstances change in a very serious way, we would proceed with that EUR 3.5 billion buyback.
Thank you. Andrea Filtri from Mediobanca asks about our assumptions for the TLTRO. Is that behind the very low guidance on Spain?
Onur.
The very low guidance in Spain, I guess you mean the revenue growth. On that one, I would push back a little bit saying that it's actually quite aggressive. For many years, we have been actually reducing. The revenue growth was negative, and we are putting a positive number, slight growth it says, but positive growth to our revenues in the planning period. TLTRO, if it's a specific question about TLTRO, we do think that the cliff effect that is coming in June 2022 will be somehow managed in our view. That's not the key part of the revenue guidance for Spain. The key part of the revenue guidance for Spain, and maybe that's behind your question, the low guidance, if you say, is the rate curve.
In our assumptions, we did not assume any major increase in the rate curve until 2024. 2022, 2023, Euribor 12 months, we still kept it at around -48 basis points, which is where we are today. That is more important for the revenue growth, and on that one, again, we are keeping a conservative curve on the table rather than an increase in the rates. That might be the reason behind your expectations and this slight growth phase for Spain in terms of revenue.
Now, Marta Sánchez, from Bank of America asks about the expectation from the takeover bid. Can we say something there?
Not much. I would rather not speculate on acceptance and nothing more than what I already said, that we're pleased with 100%, and we're pleased with any amount that takes us over the 50%, because that gives us the optionality.
Now Domenico Santoro from HSBC asks if a bank with such a risk profile might need to run with a CET1 above 12%, although being a multiple point of entry. In other words, shall we expect BBVA to run structurally with a CET1 in excess of 12%?
We don't think so. We are a bank. First, we're a retail bank. We have very resilient recurring profits. You can look back and see the volatility of our pre-provision profits. It's not only the level, but the change around that level. You only have to see the stress test results to see that we are one of the banks that best can withstand the stress scenarios. That's what's driving the regulatory requirement, which is also this 8.6% CET1 P2R, which is one of the lowest, so that also reflects that it's not in fact true that we're more risky. Given our business model, given our presence, given our result generation capacity, 11.5-12 is our target, and we do not believe we need more. I completely reject that idea, actually.
Thank you, Carlos. One last question. Andreas Dinger from Zürcher Kantonalbank asks if we will consider changing our existing forex hedging policy in case of continued devaluation of the Turkish lira.
Well, we are permanently reviewing. I mean, it's a policy that we stick to, but we are always in the review process of can we do more? How can we better manage the risks? It's possible. Yeah, of course.
Thank you very much, Carlos, Onur. Thank you all for participating. We have going to have a short break now, and we will be back in a few minutes.
Thank you.
Our relationship with money is complicated. It takes way too much space in our minds, influences our current and future actions and how we feel about them. That's why at BBVA, we want to make it a bit easier for you to ensure you can have peace of mind and make ends meet. By knowing what you've spent your money on, you'll be able to cut particular expenses and maybe indulge yourself from time to time, knowing everything's under control. We call that financial health. It's something as little as rounding up a few cents on your payments or as huge as investing in your ideal place. It's making sure that you have a good feel for your finances. This is the most important thing for us. That's why we're working to make financial health reachable for each and every one of our clients.
At BBVA, we deliver solutions based on your preferences and decisions to help you better understand and foresee your expenses, choose the way you save, plan the future you aim for, or make sure debts don't keep you up at night. It's up to you, whenever and however you want, taking full control or simply setting automatic rules. The main thing is that with our technology and a little help, your relationship with money can be a little less complicated. We reckon the best way to create opportunity for our clients is to look after their financial health. BBVA, creating opportunities.
Once again, hello, everyone. We are back with more great topics. During the next session, we will focus on the group's main levers for growth, digital transformation and sustainability. David Puente and Javier Rodríguez Soler will take you through our value proposition. First, David, Head of Client Solutions and responsible for bank's digital transformation, will explain how BBVA is leading the industry transformation.
Good morning. Good afternoon. You have been hearing us talk about digital transformation for long now. I prefer to refer to it as a business model transformation. In any case, when we started this journey about seven years ago, what we meant by it had essentially two pillars. We wanted first to build a differential value proposition. Value proposition is a very generic, very big word, but we were very specific as to what we meant by that. What we wanted to was to create an experience that made of the mobile phone the remote control of the full bank in the hands of our customers. We didn't even have a mobile application by then, and we wanted to do this in around three key ideas.
First, we wanted our customers to feel that we were an incredibly convenient bank, meaning that in the extreme, they could do absolutely anything they needed, sitting at their sofa in the night in their living rooms. Second, we wanted to give access to them to a very simple, very transparent, extremely intuitive, even for non-digital native customers, set of catalog products they could access at one click. Third, we wanted this value proposition not to be only about product services or products and services around finance. We wanted it to be around trust. We wanted to build trust with our customers, and we wanted to build that trust with genuine and wide advice, with helping them get control of their finance, helping them make better decisions, either in the day-to-day management of mon...
of money or in more high involvement long-term investment decisions, and even not in purely financial, but very relevant in life decisions. We wanted all this to happen in a mobile, in their hands. The second goal of this transformation was around changing our distribution and relationship model. We acknowledged that customers were changing the way they related to companies, and although this was not that evident or that deep in the banking industry at that time, it was obviously coming this way. We needed to evolve this solution model, this relationship model that had been for more than 150 years based on reactively attending customers physically walking into branches in labor hours of labor days.
We knew it was very clear for us that people and human relationships would continue to be very relevant in retail banking, but that was not equivalent to say that it had to happen face to face in a physical location. We wanted to build remote capabilities and remote processes to be able to extract in a remote model the power of the human to human while overcoming the bottleneck of real estate-based sort of relationship. Second thing that we saw is that as customers became more digital, interactions grew exponentially, and with them commercial opportunities, as long as we knew how to sell digitally, which had been out of our DNA for more than a century. We needed to create digital sales participation.
Third, with this exponential growth in interactions and e-channels, we needed to create an effective and efficient way of orchestrating and governing these interactions through database automatisms, so that we would be able to know what to tell to whom, at what channel, it either being a servicing conversation, a sales conversation, or advice conversation. This is what we mean by digital transformation, and this is where we have been putting significant energy and effort in the last years. This is what we honestly see we are delivering with impact. Because we have indeed created a differential value proposition around the mobile for our customers. We have been recognized by Forrester for the fifth year in a row as having the best world banking app, and that is based fundamentally on two assessment criteria.
Is, first, the depth and the variety of features we provide them, from the very basic to the very advanced. Second, the extremely intuitive UX we have built. This obviously reflects in the leading positions of our brand power in all of our geographies, but more importantly, it reflects in what our customers think of us, and in some cases, to the extent that we have turned around what customers thought of us in the past. We now have leading positions in Net Promoter Score in all of our geographies against our peer group. We have also delivered in deeply transforming our distribution and relationship model with customers. This has enabled us to reach unparalleled in our history levels of client acquisition growth.
More importantly, we have been able to do this without practically increasing our distribution cost base. On the contrary, we now serve 50% more clients per sales force than we did five years ago, and this has been possible to a big degree because we have been able to multiply the productivity through digital sales, which by the way, are about five times more efficient to produce. When you hear us talk about digital transformation, this is what we mean. This is business model transformation. It's around creating a differential value proposition that enables customer revenue growth while we reduce the unit cost to serve and to sell them. It's been a distinctive value for our clients to create a larger and more profitable bank and continuing efficiency. This is what we will continue to be doing going forward.
With a particular emphasis on the growth side, let me start from there. Growth, particularly, not only, but particularly in certain segments and certain products, where our digital transformation makes us particularly ready to exploit this opportunity, like SMEs. A big part of this transformation I've been referring to is fundamentally related with the mass market segment, has been until now related with the mass market segment because it is the heaviest and largest in terms of scale and in terms of intensity and implications in distribution capillarity. Having done this has enabled us to actually free space and free specialized distribution muscle to attend lower in size but higher in value segments, SMEs being a clear one of those. These segments are typically, demand a more specialist RM relationship typology.
Again, bringing to these specialists on the segment remote capabilities and remote processes generates both efficiency and allows us to overcome the traditional dilemma between capillarity and critical mass portfolios. This evolution of the distribution model for the segment, together with a proactive advanced analytics approach to risk, like the kind of approach we've had and is at the core of our success in personal lending or in credit cards. Bringing to digital the experience we first built for the mass segment, but with the specific features and services for this segment, is already proving to create incremental growth. This year, we will be growing revenues 7% as compared with 2019.
I'm comparing this with 2019 because 2020 was a COVID year, so probably growth rates can be contaminated by the fact that it was a depressed year. 2019 was a full speed year. Well, in a segment that has been particularly punished by COVID, we're growing the revenues by 7% and customers by 17%. Similar rationale and similar strategic approach around distribution model, specialized solutions in digital applies to the high affluent and private segment where again we have space to increase the weight of our specialists in the network, together with providing them with remote capabilities and processes, and using technology to be able to build digitally solutions, specialized advisory solutions at a scale and with the reach that was impossible to do some years ago.
Also putting in digital specific solutions, specific servicing and selling capacities for the segment, is already proving to accelerate growth beyond the rest of our business. We're growing revenues in 2021 compared with the pre-COVID 2019, and we'll continue to be seeing significant growth by 16% in terms of revenues. The net new increase in this segment, both coming from upgrades of customers and enrolling of new customers, is 70% net new increase in terms of clients than it used to be only two years ago. There's another segment, a non-retail segment, where we do see a particular growth opportunity that derives from the fact that we have a global footprint. Because we have a global footprint, we have a competitive advantage against pure local players.
I'm referring here to enterprises that are starting to seek international expansion. Of course, we have been attending big global corporations and doing significant cross-border business that is growing also very rapidly from our CIB business unit. I'm referring here particularly to this next tier of enterprises. These are domestic enterprises that are starting to seek growth outside of their core markets, that they need advisory and they need support in the process. Well, it's again around these three levers. It's first distribution. It's bringing together a specialized, geographically distributed distribution capacity, but centrally coordinated, together with specific solutions, transactional and financing solutions for these enterprises, together with a digital platform we call it BBVA Pivot, that allows them to virtually manage their subsidiaries from a single place to a single contract.
Is already and will continue to be a significant source of revenue growth. We're growing 25% revenues as compared with the pre-COVID 2019 revenues. This actually would be 34% if we look only at this second-tier kind of domestic enterprises I was referring to. The number of clients with which we're doing cross-border business has been growing also very rapidly at 26% as compared with 2019. Growth not only in, but especially in certain segments, and growth not only in, but particularly in certain products, like in payments. In payments, we think it's about a different approach to product creation. It's about thinking digital native products instead of building traditional products and then digitize them.
Last year, we launched a new concept of credit card, Aqua, which is a digital-first credit card, totally secure, that is born and lives in the mobile. Although, obviously, it has its physical version with no personal data, no PAN, no CVV, and with a set of features that live in the mobile, added value-added features like a specific PFM, a specific product PFM or a model to where the customer can digitally manage the financing flexibility options we provide with the product. A modular features for frequent travelers, and a particularly enhanced UX experience around loyalty. Since we launched this product, we have been growing net new active credit cards four times faster than we did in 2019.
Similarly, on the other side of payments, the acquiring side of payments, we're putting together a value proposition, a merchant-centric, one-stop shop value proposition for merchants that is an integrated wide range of services and products that, of course, can be digitally onboarded and that go from they start on the payment side, both online and in store, QR, tap-on-phone, mobile POS, smart POS, and digitally add additional value starting from business intelligence on their sales and POS-based financing options for the merchant or even buy now, pay later options for the customers to increase their sales.
Since we have put in now particularly focus around this proposition, we are growing net active POS six times faster a year than what we did in the 2019 pre-COVID year. Revenues, overall revenues in payments are growing by 10% as compared with the pre-COVID 2019. Insurance is another line where we do see that we still have significant room to increase penetration, particularly in the non-life products in our customer base, also particularly in some segments like SMEs.
Again, the approach, similar one, is having an omni-channel approach, so digital, remote, physical, to product distribution, together with product innovation by the hands of the best partners in each vertical, and a digital native approach to product customization, to contextual upselling, to advanced analytics-based pricing, advanced analytics-based churn models. Again, this is proving to already be showing accelerated growth in revenues as compared to the rest of the bank with 11% growth in revenues, 2021 versus the pre-COVID 2019. Increased activity, 30% more policies being sold now than two years ago. Growth is not only about specific segments or specific products. Growth is fundamentally about creating a large scale of customer base without linearly increasing the distribution platform, distribution cost base.
We acquired 8.3 million new customers this year, which is 17% more than two years ago, and many times more than five years ago, as you saw earlier in the presentation. Forty percent of this acquisition is digital, which is twice what it was two years ago. The trend is very clear. Going forward, obviously, we will continue investing in creating very easy end-to-end digital experiences for non-customers outreaching and onboarding the bank through any of our key entry products. We'll continue investing in risk and fraud capabilities.
We will continue enhancing the acquisition funnels, and we'll continue putting significant focus on the early engagement of these customers, who, by the way, already proved to have a transactional engagement six months after onboarding, which is similar or even superior to the traditional physically acquired customers. Beyond our own channels, we see partnerships with third parties as a significant lever to grow customer acquisition, and efficiently grow customer acquisition going forward. We see their platforms as a way, as a place where through seamless integration of our products and services, we can actually acquire and serve customers where they are, which is less and less going to be in our physical channels, more and more going to be in our digital, on our own digital channels, but even more in third-party ecosystems.
This is why we're putting also, and we'll continue to put, significant focus on creating partnerships, investing in open banking capabilities, and it's already proving to accelerate customer acquisition. We are acquiring through this channel 37% more customers than two years ago, and this already represents about 10% of our digitally acquired new customers. First, growth but not only in those, but particularly in certain segments and certain products. Second, we want to continue deepening the leading edge of our differentiation in terms of value proposition around two key ideas, advice on financial health and sustainability. We see sustainability as a clear revenue and volume, business volume, source of growth in the products and segments I just mentioned, and in the many other products and segments I didn't even mention.
You might have seen some details around it in the slides. But beyond that, we do see advice around sustainability, helping our customers, individual enterprises, transition in the way they change and the way they consume, the way they produce, the way they invest, as a key source of differentiating our value proposition. Javier is going to right now elaborate a little bit more on that. Let me give more color on the other key idea, which is advice on financial health. I already mentioned this has always been part of our roadmap, no? The point here is that the room here, no matter how much we work on it, is endless. The options are endless.
We do believe that this broad and genuine advice has to be at the core of what we are and the core of what we want to offer to our customers. In a nutshell, we could summarize this as building a set of tools that help our customers better understand their financial health, get control of it, and anticipate and prepare, minimize the impact of negative shocks on it. Together with an ever-growing set of digital journeys, like digital hints that are data-based, personalized, proactive, and come together with a click to a call to actions, like on a one-click journeys, so that our customers can improve their financial health with little effort. They can effortlessly start building a savings cushion. They can very easily start putting their money to work.
They can very easily improve diversification of their investments. They can, in the end, more easily manage and achieve their long-term life goals. We have now about 30% of our digital customer base recurrently interacting with these tools or being exposed to these journeys, and the results in terms of the attrition and the NPS, Net Promoter Score, we have on these clients is clearly significantly better than the rest of our customer base, which is precisely what we are after. We want to create a value proposition that is about advice. We want to deliver them value through helping them make better decisions and generate engagement in return.
Collaterally, we're also seeing that there is linkage between some of these tools and some of these advice journeys and the commercial productivity in some products, like the case of mortgage or new investment funds productions, as you see in the slide. Third, efficiency. Continue driving efficiency through a transformation in the first place, through a transformation of our relationship model and our distribution model, which is at the core of our transformation. Of course, we will continue to be rechanneling low value servicing, including voice services to the AI channels. Of course, we will continue to be simplifying mass market roles in branches while improving the coverage of value segment sales forces.
We'll continue optimizing our footprint, but fundamentally, we will continue building a remote attended model with full capacity to serve any customer as if he were in a branch. It's not only about this, it's also about leveraging technology, data, advanced analytics to make sure that we extract out of every single interaction the best we can extract from it. It's about using data and AI to rightly or smartly filter route to the right channel and offer them the right call to action, then the right next best conversation. It either been around servicing, around deepening digitalization, generating a commercial opportunity, or giving advice.
This transformation of the relationship and distribution model, as I'm saying, is at the core of our roadmap and is at the core of the impact we're delivering through this process. It is accelerating. This year, we will have 40% less human-attended transactions per branch than only two years ago. This year, we will have triple the number of customers being served through a remote model. A remote model that, by the way, improves the MPAs and of course, increases the coverage. More importantly, this combination of digital and remote and the physical presence that is enabling us to increase the productivity, to make a leap in productivity, both in terms of coverage and in terms of commercial productivity. We now serve 24% more customers per sales force than two years ago.
We create 21% more sales value per sales force than two years ago. Of course, the big part of the increase is coming from digital sales. When we talk about efficiency, of course, the transformation of distribution and relationship is at the cornerstone of it. We also have a very important strategic key lever for us, which is both a source of efficiency and effectiveness, which is leveraging globality. There are many perspectives as to how we leverage globality, but building global solutions with a faster time to market and reducing IT costs through reutilizing global components is a very tangible example of it.
To just use a couple of examples, we now have a retail banking app that ranks top in its Android version, its iOS version, in fundamentally all of our geographies, and we have been able to achieve that through 75% code reutilization. An even better example would be our mobile application for enterprises, which we didn't even have a few years ago. It took us less than one year to build it from scratch and put it in the hands of our customers in our first geography. We were able to do that to a big degree because we reutilize global services, global UX components, global design components, and even features that have been first built for the global retail application. Now the customers immediately ramp up in terms of usage of the application.
It ramped up very rapidly. We are now able, through reutilization of code that exceeds 80% of what we build in the application, deployed in the rest of the geographies in less than six months per geography. What I wanted to convey is that when you hear us talking about digital transformation, it's rather a business model transformation. It's not about something that goes like on the side of the normal business. It's fundamentally the business, the way we do business and the way we grow the capabilities to do even more business going forward. It's the transformation of the business around these three key ideas.
It's building a differential value proposition that enables us to generate sustainable customer and revenue growth while we reduce the unique cost to serve and to sell them. Thank you very much.
Thank you, David. It's time to talk about sustainability, a new global business area. This area has been recently created to support our commitment to addressing environmental, social challenges. It will enable us to capture new business growth opportunities. To talk about this, we have here Javier Rodríguez Soler, Head of Sustainability.
Thank you very much, Patricia. Good morning. Good afternoon. Thank you very much. Sustainability, after the excellent presentation by David about the journey we've been embarked on for more than a decade in the digital transformation, now we've been embarking another passionate journey, which is helping our clients transition towards more sustainable future. Sustainability is a very broad concept, as you all know, in our organizations and obviously at BBVA. That includes all aspects related with environment, social aspects, particularly relevant for BBVA, where we have such a relevant presence in emerging markets and all the governance aspect, diversity and inclusion, et cetera. We want to pay particular attention to one part of the sustainability transformation, which is the decarbonization efforts that the world needs to keep working on to combat climate change.
As Onur and Carlos commented earlier, decarbonization in particular, and sustainability in general, represents the biggest transformation in human history. That means that $7 trillion worldwide are gonna need to be invested to decarbonize human activities in all different sectors in our day-to-day lives. It's $7 trillion per year, and this is gonna affect the whole world, particularly where BBVA operates in our main footprint. Let me give you a couple of examples. In emerging markets like China, EUR 1 trillion of these $7 trillion per year is gonna be invested in sustainability in emerging markets where BBVA is one of the leading banks. In Europe, we have a presence not only in Spain, but incorporating investment banking in the whole continent.
A big part of the investment is gonna come with the help of the Next Generation EU funds. Public money and private money will drive the change, will represent the biggest investment opportunity in human history, as we said, in absolute terms, no doubt. What is the role of banks? What do banks need to do here? As we said, $7 trillion need to be channeled through this effort. Obviously, a lot of it is gonna come through corporate CapEx, savings and so on, but a high proportion of it, 80%-90%, is gonna come from private money, and also the public money needs to be channeled to its destination.
Banks need to mobilize this capital, mobilize enormous amount of capital, historically high amounts of capital, develop sustainable financial solutions to our customers, and very importantly, manage the impacts of this transformation. We call it internally the sustainability shock. We have to manage our risks. Banks which do not react and do not learn what is happening, what is gonna happen the next decades, will suffer in their loan books. It is a huge risk, but more importantly than ever, it's a huge business opportunity that we are taking advantage of already. Let me give you a few numbers. From 2019 to 2020, as you see there in the exhibit, we had a 13% growth.
It started to be very promising in what we call sustainable finance, which by the way, implies 80% of it is climate change, 20% is inclusive growth, and they go hand-in-hand. 13% growth in 2020. 72% growth, up to more than EUR 35 billion. 72% growth in sustainable finance in 2021. More importantly, 12% of the business origination, which is represented in sustainable finance, it is new business origination. It is new business origination that the rest is the business as usual, but 12% is in sustainability. That's what represents the EUR 35 billion I mentioned. Twenty percent of this total, we created that because of the sustainability effort and the leadership we've had, compared to our competitors. Let me elaborate a bit more on this leadership.
How can we be one step ahead of our competitors, taking advantage of this opportunity and helping our clients transition towards a sustainable future, bringing the age of opportunity to everyone? We have to offer them products that serve their needs in these decarbonization efforts: green mortgages, loans to electric vehicles, giving them specific advice. As you see there in the exhibit, there is staggering growth rates, almost three times growth in sustainable mortgages. 232% growth in the electric vehicle loans. We've created the carbon footprint calculator. We've been the first bank in the world which allows clients to know how much they are contaminating, how much they are contributing to the global warming, for them to be aware of what is happening.
470,000 visits year to date in the mobile app of BBVA for clients that are interested already in seeing what is their carbon footprint. We are educating people. The decarbonization effort requires the effort of corporations, government, individuals. Everybody needs to be aware, and with services like the carbon footprint calculator, we are making sure that our clients are aware what is happening and take advantage of this opportunity for them to be transitioning. In 2007, when the banking world started to work on decarbonization, we already participated in the first worldwide green bond. Since 2016, we not only have been participating, we have been leading in all products in the decarbonization and in the climate change and the social inclusion, leading in all efforts.
We've been participating in the first worldwide green project finance in 2017, the first Turkish green bond in 2018, the first worldwide gender loan in 2019, the first Mexican gender bond in 2020, and so on and so forth. We've been one step ahead. That's why we've been able to capture a 20% additional business than what we would have been otherwise. We were one of the first banks in the world who committed to net zero 2050. We were one of the banks who founded the Net Zero Banking Alliance. As you know, in COP26 it was announced that 40% of the financial industry is already committed to net zero, but we were one of the first banks who founded the Net Zero Banking Alliance. Now we've implemented the portfolio alignment exercise.
We've been one of the few banks to start committing sector by sectors in the CO2 reduction. We've started with five sectors, coal, cement, steel, auto, and power. In coal, we've committed to phase out. Coal, as we know, in power generation and in other industries, is the most polluting technology for power generation, so we've committed to phase it out in 2030 for the developed world and completely worldwide in 2040. Many banks are following our steps. For power, auto, cement, and steel, what we are doing is relative CO2 emissions of our clients. We've seen what is our starting point. We've been very fortunate to realize that we are in a privileged starting point.
Our clients are in a privileged starting point. As you see there in the fourth column, how we compare with the benchmark in all sectors that we've started to commit in the portfolio alignment, we're in a similar or better position. We want to continue helping our clients, and we've been studying their plans, and we have been seeing what they plan to do, and we commit to help them with these reductions. With 52% reduction in power, relative emissions, relative CO2 emissions, 46% in auto, 23% in steel, 17% in cement. As you see, different proportions up to 2030 because some sectors are much easier to abate than others.
Apart from that, this is the Scope three, the famous Scope three, that banks need to worry the most because it's how much our clients contribute to the global warming, and we need to help them to reduce that. Also in scope one and scope two, we want to be 100% renewable energy by 2030, and we are already carbon neutral since 2020, and we plan to commit to do so in the future. As David has been saying earlier, this is a huge growth opportunity for BBVA and for the banking industry. Years ago, many investors and many people in the community thought that the ESG efforts were gonna go against their interest, the interest of shareholders in favor of other stakeholders. That's not the reality.
This is something that is gonna benefit enormously shareholders because it's the biggest growth opportunity we've all faced. Obviously, some banks will be able to take advantage of this. There will be winners, but some banks are not there in this race yet, and they will be losers. This is a growth story, and to take advantage of this growth story, as I showed earlier, we started in 2007, and we've been consistently at the forefront. We need to keep innovating. Many technologies are not yet proven. In many geographies, still some technologies are not economically viable. We need to go client by client, technology by technology, opportunity by opportunity, and geography by geography, taking advantage for those initiatives that are bankable and that where we can work with our clients.
For that, we need to keep improving our enablers. We are clearly one step ahead of our competition with our risk processes, our compliance processes, our legal processes to make sure that we are taking advantage of this opportunity that is with us already, but it'll be here in the next few decades. What does it mean in terms of numbers? Up to the third quarter of 2021, we already channeled EUR 75 billion that made us the comfort to double our pledge. We plan to channel to sustainable finance $200 billion up to 2025. Very importantly, of the EUR 75 billion, only in Q3 2021, we channeled EUR 8 billion already. How do we compare with our competitors?
You can see that in the right-hand side of the exhibit. Clearly, compared to our size, we are one of the two most committed banks in the world. This is a very big number, taking into account that EUR 200 billion, 20% of it may come with new business, which represents EUR 40 billion. It is new business that we would not have generated if we were not embarked in this huge effort of sustainability. Let me be more specific what it means by that. This is not about following a trend, okay? There are some opportunities that some banks are jumping on them because those who are more innovative like us, we're really working on them, and now everybody wants to do the same. As I said, different technologies for different geographies, for different clients.
This is a process. It's a journey. What we've done is we've studied the whole decarbonization effort worldwide, and we've analyzed opportunities by size, by growth in the next few years, and more importantly than anything else, by our right, what we call the right to win of BBVA. Some opportunities are more natural for BBVA because of our footprint, because of the capabilities we have, because of the innovation it requires. Of all the opportunities in decarbonization that represent the $7 trillion that I commented at the beginning, we have focused on where can we add value to clients, where is there gonna be higher growth, higher price, where we want to participate. Let me be specific about the 12 transition themes that we have identified. In power generation, renewables at utility scale, it's already there.
In Europe, it's already there. Where we are learning in Europe, we are applying that knowledge to Turkey, to Mexico, to Latin America, to other markets. In power, much less advanced technologically, but the opportunity may be huge. Hydrogen production and use in some countries where we operate, actually in all countries where we operate, is gonna be very big. It's about renewable energy generation, producing green hydrogen, and making use of the hydrogen for many uses. Hydrogen and renewables at the utility scale. In transport, electric vehicles, you've seen the announcement of almost all car industry car auto manufacturers announcing their electric vehicles plan. You've seen the value of some electric vehicles companies out there, which one company may be worth more than the rest of the industry.
We'll be there financing electric vehicles, but very importantly, also financing the infrastructure for electric vehicles. In industry and oil and gas, we want to help oil and gas players in their product transformation, reduction of methane and in reducing their emissions, because oil and gas, of course, will be needed, particularly gas in the transition. Oil may have a tougher road ahead, but we want to help our clients again in their transition. All clients have the right to transition if they are committed. Of course, electrification and use of hydrogen again for industrial heating. In buildings, distributed solar generation, it is already huge in some of our markets, like for instance, in Turkey. In all our markets, Turkey is the leader in distributed solar generation. For sure, Spain is very big.
Mexico, one of the countries in the world with the best resources in terms of solar hours per day, which is actually the key for that generation. Energy efficiency. Much easier to say than to execute, but if banks have a know-how which is relevant, and particularly BBVA's in-house in commercial real estate, we have huge experience. We think we have the right to win in energy efficiency for buildings. Agriculture. Particularly relevant in our emerging market. We want to innovate in agriculture, adaptation for higher yield crops for resiliency, and the decarbonization of the on-farm energy. Circularity, very relevant for steel, for textile, for plastics. We want to help our clients in this. We have very relevant clients in all the sector. We want to help them in circularity.
It's not necessary that all the steel which is produced is extracted from the earth. A lot of steel is already there in the form of used cars, in the form of buildings which are being amortized. This steel may be used again. The same with plastic, the same with everything. It is aberrant if you want that in the last 200 years, what we've been doing is just to extract, use, and then discard. Now circularity is a huge wave in which the business opportunity is enormous for banks who really commit and know how to do it. Last but not least, carbon markets. We're a bank. We participate in the carbon markets. There's been a huge advance in COP26. There's still a lot of room for growth, but Europe is more advanced than other markets.
There are a few markets out there, like in the U.S. as well. Europe is one step ahead with the EU ETS. There are a few voluntary carbon markets where emerging markets will play and are playing a very relevant role. In carbon markets, we have a huge business opportunity that we are taking advantage already and that we want to multiply in order to help the world decarbonize and at the same time, make a lot of business out of it. As I insist, the right to win of BBVA, why are we more advantaged than other banks to take advantage of this business opportunity? Because of what we do, how we do it, how serious we are, and very importantly, where we are. Let me give you an example.
Relative to GDP in Latin America, the emissions required to reduce net zero in 2050 is gonna be 7% of GDP versus 5% for Europe or 5% of the average of the world. In our footprint, the relative investment is gonna be even higher. For that, we need to create specialized knowledge. Again, this is not about demonizing some sectors. Of course, there are sectors that need to be phased out. Coal is probably the best example, but other sectors need to transition. We need to monitor our clients' strategies, understand where they are, starting points. As I commented, we are fortunate to realize that our clients and our portfolio is cleaner and with lower transition risk than other banks. Having a very good starting point is not enough.
We need to help transition and reduce in the proportion I commented earlier, monitoring our clients, seeing their commitments, and year after year, seeing if they are meeting those commitments. They will be forced by their own regulators, their own clients, but we want to also force them to decarbonize and advise them, you know, and helping them on how they can do it. For that, we will need sectoral deep dives. We will never know more of the steel sector or the cement sector than a company specialized in that. We will know what others are doing, the plans of others, how they are committing, and we will know where we want to deploy our money and our advice to those who are doing it better.
This sectoral knowledge, horizontal knowledge in each sector and each geography is gonna be very helpful. Again, what we are learning in Europe is being applied already in Turkey, is being applied already in Latin America or Mexico. We have to quantify the impact of these scenarios in the financial risk and metrics. I insist, it is an enormous business opportunity, but it is also very high risk for those banks who are not able to really adapt to what is happening. Let me give you a very good example of a tool we've developed that we call internally TRI for Transition Risk Indicator, which is precisely this. We've started with three sectors, automotive, energy, and utilities, and we are working on the rest of the sectors.
In each of these sectors, we've analyzed client by client where they are today in terms of relative emissions per kilometer or per megawatt, depending on the sector, and we've seen what are their plans. According to that, we've put them according to our TRI, either in an advanced, strong, moderate, or poor position. As you can see there, this is real, this is based on real data. In automotive, the car industry is already reacting very fast. Most of our clients are already in a strong position. Some are in the moderate position. Very interesting, the dialogue with those in the moderate position, letting them know that they are worse and telling them how we can help them.
In energy, as you see already, we are fortunate to be the leading bank to some of the most advanced utilities in the world, and they are very strong, but we need to help some which are in the moderate position and some others which are in the poor position. We are willing to help them, advise them, and keep banking them if they react and move up. Otherwise, we need to exit those positions. In utilities, as well, you see this representation there in the right-hand side. In summary, which are the main messages we want to convey? First of all, we have already channeled EUR 75 billion. This is a reality. BBVA has captured a disproportionate market share, punching above its weight because in sustainability, we've been ahead of others.
Growth of 72% versus 2020 with EUR 75 billion already channeled. That's not enough. We want to commit. We've committed double our commitment to EUR 200 billion up to 2025. 20% of this, based on history, is incremental business, EUR 40 billion incremental business. For that, we need to have a specialized sectoral knowledge and keep improving our transition tools to manage the risk of what we have, to manage the risk of the help we give to our clients, and to keep being one step ahead. This is like running a treadmill up to 2050 to go to net zero in each geography, in each sector, with each company.
This is a very long journey in which the key is to be one step ahead in order to be one of those winners in the banking sector industry. As of now, we are very proud to have been recognized by the most reputed institution, the Dow Jones Sustainability Index in 2021 as Europe's most sustainable bank, as Carlos already mentioned. Yes, it's true, we are only second worldwide, so we still have room for improvement. Hopefully, we'll be number one very soon. Thank you very much.
Thank you very much, Javier. The audience has sent some questions for both of you, Javier, David. I think we are ready now to move into the Q&A session. First, a couple of questions for David. Different shareholders are asking, how is BBVA reacting to the threat of new entrants in different products?
Well, new entrants, we can see new entrants from two perspectives, no? From a competitive perspective and from a collaborative perspective. From a competitive perspective, we do acknowledge that new entrants, and regularly new entrants in certain fields, are bringing true innovation, are creating true new digital experiences that are definitely adding value to customers, which is what we are after. We welcome innovation sources in the industry, and they oblige us to strive and to constantly seek the way of being at the edge of our digital proposition. Well, that is a first angle, no?
We ourselves have been launching new little businesses, new ventures, and we do know the other side of also the challenge that the new entrants face, which is it's hard to get a customer scale. It's not that complicated to grow. It's quite complicated to grow and do it profitably and sustainably. We do have sources of competitive advantage, which is our huge customer base, our, by the way, multi-channel, omni-channel distribution capabilities. This together with the fact that we have been at the edge, at the leading edge of creating digital experiences within incumbents, is making us compete well with new entrants. Again, they give us, they oblige us to strive and to make sure that we are at the level.
There is another way of looking at it, which is the collaborative side. We have been very close to the fintech ecosystem for years through our open innovation initiative to begin with, also through our vehicles through which we invest in these startups. We do partner with them when they can provide efficiently some added value to our customers that we can easily integrate into our channels, which is something that we also do. It's at the core of how today we do our digital onboarding, for instance, with customers and face recognition. Many other innovations we are incorporating through collaborating with new entrants. I guess that double way of seeing it is the way we see it.
Thank you very much, David. Ricardo Benítez González-Piñero from Fidentiis asks, Cryptocurrencies, are you planning on a specific strategy for providing customers with this optionality within the next three years?
We have been at the forefront of blockchain and crypto in the last years. We have been one of the only banks or the earliest bank to actually be doing a real life pilots with specific products around trade finance, around payments, with the specific clients. We are very close to the blockchain and the crypto transformation implications. We are very aware of the deep implications it's gonna be having. It's already having and will be having further around how payments are done or around how information is treated. Even on the transformation of the capital markets industry through the tokenization of assets.
Decentralized finance probably has the very high probability of profoundly transforming the way financial services are delivered, and definitely in certain areas like FX, for instance, no? We have been and we plan to be at the forefront of innovation around blockchain and crypto. Early this year, we were one of the first banks to launch a custody and exchange solution for trading crypto for our private banking clients in our Swiss franchise. We definitely have the appetite to provide value to our customers around the world. We want to do it very hand-in-hand with the regulators.
We believe a clear regulatory framework is absolutely fundamental to make sure that these services are provided to larger bases of customers with complete security, and also at the same time, fueling the innovation that this new technology can provide.
Thank you, David. Now, a couple of questions for Javier. Francisco Riquel from Alantra, Stefan Nedialkov from Citi, Andreas Dinger from Zürcher Kantonalbank are asking about the profitability of sustainable business. Can you give us an indication of how the return on risk-weighted assets in sustainable financing compares to that of the traditional lending activities? And what are the main differences in terms of revenues, cost of risk, and allocated capital?
Yes.
Thank you, Patricia. This is an excellent question, and I'm not surprised that so many of you have asked about it. As I've commented earlier, the key here in sustainability to really move the needle in decarbonization, to help financial system and BBVA in particular to mobilize all this capital, is that this is more profitable than normal banking business. Absolutely key, the risk parameters, the cost parameters, and the return parameters of this activity is absolutely critical. If it were not profitable, we wouldn't mobilize billions and trillions which are needed worldwide. In order to do that successfully, let me remind the figures that I commented earlier. We've mobilized already EUR 75 billion. 12% of it is
This EUR 75 billion represents 12% of our total generation of business, and we've estimated approximately, based on differential market shares, that 20% of that business was new. You go product by product, client by client, you realize that this is more profitable, but for those who know what to do it. It is different technologies at different level of maturity in different markets and with different clients. There are some. One good example is some technology which become mature quite fast, good for fast decarbonization, and maybe not so good for returns. Like for instance, renewables utility scale in Spain or in Europe is already there. It's economically very feasible. It's the most profitable technology, very easy to finance, so the margins may be more narrower now than they were a few years ago.
You need to play them smart and be, I think, a competitive advantage to really take a big advantage of that in terms of returns. We commented, or hydrogen or agriculture or reduction of methane for oil and gas companies, those banks like us who know how to specialize, and that's why tools like the TRI or the new processes that we're reviewing in Greece to calculate the PD/LGD based on the experience we are gaining with different clients. It is about the sectoral specialized knowledge to help in the technology and in the geography to the client that is really give you extra return. It's bottom-up specialized knowledge that give you extra return if you are the one who knows.
Of course, then at some point in time, one of these technologies gets commoditized, which is great for the decarbonization efforts of the planet, and then the banking business becomes less profitable and you need to move on to new opportunities. Bottom line, more profitable for those who know how to do it. For those who don't, they will suffer a lot and their portfolios will suffer. This is gonna be discriminatory among banks, and you will be, I'm sure, paying special attention to this discrimination among specialists and non-specialists.
Thank you, Javier. There is another question for you. Carlos Peixoto from CaixaBank is asking about our decarbonization reduction targets. Your carbon reduction target for 2030 is a positive initiative and more transparent than most peers. You have established your target in an intensity per unit basis rather than an absolute reduction goal. Is this complemented by a plan to reduce the overall carbon emissions? How much does each of the sectors of which targets were announced represent BBVA's loan book? Oil and gas, when should we expect carbon reduction targets for oil and gas?
Yes, Carlos, we've had this debate internally. We still have. This is an ongoing work. Let me remind you, we've announced the portfolio alignment already for coal, in which it's an absolute reduction because it's phase out, but that's one very particular technology. We've announced it for auto, power, cement and steel. Relative reduction, this is what matters. The world needs cement, steel, power, and autos. I will talk about the other sectors that are not in the portfolio alignment yet in a minute. We need this. What we need is that these industries transform themselves and emit less and less CO2 per unit produced. We need autos, but we need autos which don't emit so much CO2.
We want to help auto manufacturers, our clients, to transform the transition, making sure that they keep doing autos, but that pollute less and emit less CO2. Obviously, the absolute reduction would be quite easy. You just stop banking with those and you dramatically reduce the exposure. This is about the decarbonization effort, net zero 2050. This is very important. Net zero 2050 and all the intermediate goals, those I announced today are for 2030. It is about the world is gonna consume more energy, 50%-100% more energy. We are 8 billion people, and not all of us have a car, a big house, travel in planes. People want to travel, consume.
Mm.
The energy consumption in the world is gonna multiply. The key, and we banks need to help those who produce cement, steel, autos, electricity to keep producing, but we need to produce with less intensity. The key is reduce the relative exposure to CO2 emission. It's not having a lower exposure to to the absolute emissions. This is very relevant. Again, this is an exercise that requires sectoral knowledge, how the cement may be abated, how fast the power sector may change from CO2-emitting technologies like coal, gas to non-CO2 emitting like renewables. This is sector by sector, company by company, and what matters again is the relative CO2 emission reduction. You asked me about oil and gas, and I don't wanna avoid this complex sector. By the way, bear with me.
I think we'll soon stop talking about oil and gas. This is oil and this is gas. It's different realities. It is true that a lot of this commodity is extracted from the same place, but it's different stories. Oil has probably for the next decades a journey of reduction in consumption of oil because of the huge proportion of it in autos and in the land transportation, light land transportation, cars mainly. This is gonna change dramatically. Then there's a lot of development also in aviation and shipping, which are also heavy users of oil. Oil is one story. Oil, the name of the game for oil is, again, relative reduction, and particular of methane.
Methane emits, in CO2 equivalence, or makes the greenhouse gas effect more complicated 50-80 times more per ton than CO2. Reducing methane emissions in oil is very relevant. Oil companies need help. Those who commit should have the help of banks. That's oil. Gas is a transition sector, a transition technology for the power sector and for others. It'll have a challenging world. Many parts of the world are still consuming coal for electricity. Replacing that with renewables tomorrow would be great, but this is not gonna happen. We'll see a lot of renewables, we'll see a lot of gas replacing coal, and then this gas being replaced by renewables. This is at least a 30-year long journey, and even longer.
It is about relative emissions per client, and we'll continue with and all these five sectors. The next five are gonna be aviation, shipping, oil and gas, agriculture, and real estate. Thank you.
Thank you very much, Javier. Going back to David, Marisa from GVC Gaesco asks, on payments, our major incumbents, the banks, and other tech players are bidding on payments. Is the market big enough for all of you? What are your differential strengths versus competitors?
We can discuss incumbents and new entrants. New entrants in the field of payments, we're seeing new entrants are being incredibly successful and have generated significant innovation in the payments field. This is, as I said, one of our key strategic areas, but not only because of the revenue potential, but because payments and wider transactionality engagement with clients is the core. I mean, the customers with the lowest churn are the ones with which we have transactional engagement. Payments is a big part of it, of course. This is why we have both a particular focus on the area, but also an integrated focus.
We don't see this as a siloed thing. It's part of the value proposition. It is core not to generate the revenues per se, which is also important, but to get information around which we can offer a better service and better products to our customers. How do we compete? Well, as I said, here we believe it's about having a more digital native approach to product creation, which is what we're saying and what we're doing. We don't think we have. We can look in the eye to new entrants in the digital experience we're providing to our customers, and we have a very wide reach through our omni-channel distribution capability.
Actually, we look at the numbers, obviously it's not a guarantee of anything, but we are increasing market share in payments, both in the issuing and the acquiring side in all of our markets. We're growing this year, 30 basis points our market share in the issuing side in Spain, and more than 300 basis points in Mexico, 80 basis points in Turkey. On the acquiring side, it's a similar story. We're gaining market share in conventional acquiring in Spain, which is, in the case of e-commerce, more than 100 basis points increase. More than 100 basis points increase market share in Turkey, 80 basis points increase in Argentina. This does not guarantee anything.
The key thing is that we need to be at the leading edge of this. The leading edge of this is to a big degree being set by pure digital players, which is why we're focusing so much on a top-end digital experience.
Thank you, David. One more question for you. Daragh Quinn from KBW asks, if given the jump in digital usage from clients, should we assume the physical distribution network continues to shrink? How does the experience differ in emerging market versus developed markets?
Well, I would like to emphasize that we don't have any goal around shrinking our physical distribution network. The goal that drives us, and actually the KPIs we follow, is not about the number of physical branches. It's about how the behavior of our customers is evolving and how we adapt the way we serve them so that it better suits them, you know, through digital, through remote, through physical, and also with that, how we increase productivity. How we increase productivity together with increasing the quality of our service, and this is what drives us. Obviously, we have a dynamic approach to this, because we feed it with data and with the feedback we receive with the changes we do.
Overall, and regarding the question on emerging markets, we have been reducing our physical footprint across the group, obviously in a very significant way in a market where physical capillarity was very significant, like in Spain, and where the maturity of the market was leading us to do that more aggressively. We have reduced branches by 40% since 2017. But in this same period, we're reducing branches in Mexico by 5% or in Turkey by 6% or in the whole LatAm by 2%. Overall, the trend is the same. The conditions are different. And by the way, while we do this in areas where demographically are showing a significant opportunity for growth. Again, we don't see digital and the rest.
We see serving clients who happen to relate with us, sometimes easily, sometimes they want a remote manager on the phone, sometimes they want to get into a branch. This is what we do.
Thank you very much, Javier. Thank you very much, David. Unfortunately, we are running out of time. There are further questions remaining, but well, from the IR team, we'll help you to address them in the next phase. Thank you very much for your participation, and let's take a break, and we will be back here with a more in-depth view in the bank operations in Spain, Mexico, and Turkey.
Our relationship with money is complicated. It takes way too much space of our minds, influences our current and future actions and how we feel about things. That's why at BBVA, we want to make it a bit easier for you, ensure you can have peace of mind and make ends meet. By knowing what you've spent your money on, you'll be able to cut particular expenses and maybe indulge yourself from time to time, knowing everything's under control. We call that financial health. It's something as little as rounding up a few cents on your payments or as huge as investing in your ideal place. It's making sure that you have a good feel for your finances. This is the most important thing for us. That's why we're working to make financial health reachable for each and every one of our clients.
At BBVA, we deliver solutions based on your preferences and decisions to help you better understand and foresee your expenses, choose the way you save, plan the future you aim for, or make sure debts don't keep you up at night. It's up to you whenever and however you want, taking full control or simply setting automatic rules. The main thing is that with our technology and a little help, your relationship with money can be a little less complicated. We reckon the best way to create opportunities for our clients is to look after their financial health. BBVA, creating opportunities.
Hello, everyone. Welcome back to our Investor Day. Let's take a look into how we are going to accelerate profitable growth in our main markets, Spain, Mexico, and Turkey. We will start with BBVA Spain's country manager, Peio Belausteguigoitia.
Thank you, Patricia. Good afternoon and good morning, everyone. Welcome, and thanks for joining us today. It's a pleasure for me to share with you this presentation of BBVA Spain. During my speech, I will be addressing the following topics. First, I will briefly describe the competitive environment of the banking industry in Spain. Afterwards, I will summarize the great achievements of the franchise over the last five years. Lastly, I will explain our ambitious strategic plan for the next three years. I'm going to start with an analysis of the Spanish economic scenario and what BBVA research is predicting for the next few years. We expect to have a positive GDP growth driven by the improvement in private consumption and the housing market, the expected recovery of the tourism sector, low interest rates and high rate affordability, and also the impact of the Next Generation funds.
Regarding interest rates, we foresee a stable period, 12 months Euribor levels below minus 40 basis points, similar to the levels that we are observing right now. Our forecast shows a slight improvement for 2023 onwards, reaching positive levels in 2024. Finally, we expect credit to increase slightly in 2021 and to continue the same pattern in the following years, thanks to an improvement in household loans stock. Now let me turn to the second point of my presentation, the achievements of BBVA Spain in the last five years. I am very proud of what BBVA Spain has accomplished during this period. The first achievement that I'd like to highlight is customer acquisition. In the last five years, our ambitious open market strategy has allowed us to acquire 3.5 million customers, and that has not been a linear increase.
Every year has beaten the previous year. 2021 is clearly an example of this trend. We are growing at a rate of 54%, and our customer acquisition market share is well above our current natural market share. Furthermore, we have the best digital onboarding process. To date, 50% of our new clients come from digital channel. All this effort would be useless if we were not able to engage this new customer, but this clearly is not happening. To the contrary, 70% of new clients become what we consider to be engaged clients within six months of enrollment. As a second achievement, and as a result of our strategy, we have done an excellent job allocating our capital to the most profitable segments and products. As you can see, our stock of consumer and very small business loans has grown significantly in the last five years.
This growth has been coupled with robust risk management policies that position our cost of risk 32 bps in the nine months of 2021. Let me continue with other relevant accomplishment. Non-interest income has been one of our top priorities in the last five years. I show you some figures that can illustrate this. On the left-hand side of the slide, you can see the strong growth of fee income, which has risen 44% since 2016. A solid figure that puts us ahead of our peers. Very strong performance in recent years. In asset management fee, we have done a very remarkable job in terms of volumes and commissions levels with a great contribution to our P&L. Very strong performance in insurance fees too.
Premiums have grown 32% since 2016, a clear evidence of our productivity increase both through physical and digital channels. Another relevant achievement I want to talk about is efficiency. For us, efficiency is a must. Factors like the increased weight of digital sales and the dynamic assessment of our distribution model are enabling us to sell more with lower cost. Our efficiency rate is currently 49%, 8.5 percentage points lower than in 2016. We have a proven track record in the reduction of our cost base, which has decreased 20% in the past five years, sorry. Year after year, we have delivered continued cost reductions without one-off. We are really, really satisfied with how we have managed this key priority for us.
We have gone through the four most important achievements of BBVA Spain strategy, and now this slide shows the impact of the work done in the last years. Two big ideas. First, we are top performance in terms of efficiency and profitability. Both metrics among the main challenges that banks are facing now in Spain. Second, we lead customer satisfaction with the highest retail NPS level in Spain, almost 13%. This means we are doing much more than satisfying our customers' needs. We are going beyond that point. We are very proud of the achievements that I have mentioned, but we are even prouder of the ambition we have put into the strategic plan set for the next three years. In the following slides, I will review the main drivers of our strategy for the coming years. First, profitable growth. Second, a unique value prop.
Third, promoting operational excellence to continue improving efficiency. Growth will be the main focus of the next part of the presentation. In the current scenario, scale is a must, and to achieve our ambitious growth goal, we will increase our customer base, we will capture the opportunity of the green transition in all of segments, we will improve our lending mix by growing the most profitable segments, and we will broaden the diversification of our revenues. Continuing our success story in growing our customer base, our aspiration is to acquire 3.6 million customers in the next three years. This means twice as much per year than what we have acquired during the preceding five y ears. To reach this aspiration, both our own channels and third-party agreements are key.
In our own channels, our strategy is to continue delivering functionalities that provide even better user experience in our already best-in-class digital acquisition process. Today, banks must be where customers are. That is why we believe that third-party agreements and collaborative ecosystem are a great way to compete in today's environment and to increase customer acquisition. We have signed and will keep signing strategic agreements with partners in different sectors to reach new customers. Another lever of our growth strategy is sustainability. Our goal is to help our customers in their transition towards a sustainable future and to turn this into a tangible growth opportunity. In the last years, we have laid the foundations to make the most of the potential that decarbonization will bring. We're pioneers developing the first green solutions for corporates.
We have developed a fully sustainable product catalog for retail banking customers and a wide range of tailor-made solutions for enterprises. We have integrated sustainability into all our business and support processes, ensuring, among other things, that our teams have expert training. As a result of this, we have become a benchmark player in the industry. By 2024, our aspiration is to grow ambitiously well above our natural market share. To achieve this, we will focus on creating a value prop, joining forces with the best players. In this slide, I like to share with you our growth strategy in consumer lending. We are really very proud of the exceptional performance of our consumer loans portfolio. In the last five years, we have increased our market share 400 bps . This is really, really remarkable achievement. What is our aspiration for the next three years?
To reach a 30% consumer loan growth. These are very demanding figures, especially considering the extraordinary growth of this portfolio over the last 5 years. How are we going to do it? First, we will continue improving our risk and data models to gain even further customer insight. They allow us to increase our scope for pre-approving individual loans and to customize pricing. Also, our digital capabilities will continue to be essential to achieving our goals, since most of our sales come through our app. Of course, I said before, sustainability will be a huge opportunity for growth in all portfolios, and consumer won't be an exception. Another key portfolio that offers interesting profitability levels and potential for growth are SMEs. Our franchise has grown this portfolio by 20% since 2016.
For the next three years, we intend to replicate this growth with a different approach, depending on the size of our commercial clients. For very small companies, the strategy is to replicate in a way our story of success in consumer loans. We plan on leveraging loan origination on several key capabilities. Digital solutions, such as Click&Pay, risk models to proactively approach customers and non-customers with personalized financial solutions. For larger companies, differentiation should be based on advisory and sustainability. We perceive many opportunities for growth, supporting our enterprise clients in their expansion into new markets and working with them in their sustainable transition. Let me continue with payments, which represent one of the greatest opportunities for growth. Payments are both a quality income source and an essential solution for customers. That is why we have launched disruptive solutions to increase our presence in the markets we serve.
Our new card, Aqua, is a great example of innovation for customers and a great success for BBVA. In the first 9 months of 2021, we have tripled our card issuance. As you can see on the right hand of the slide, our goal is to exceed our natural market share. In issuance, we will leverage on our Aqua card to reach new customers who want to make online payments in a more secure way and with a better experience. In acquiring, we will develop a broader product catalog and value-added features for physical and e-commerce, where we have a leading position, as David has mentioned before. Also, we plan to keep investing in new trends, such as instant payments. We will take advantage of platforms like Bizum, with more than 80 million users, and develop new functionalities for merchants.
Two other sources of revenue diversification are asset management and insurance products. As you can see on the right-hand side of the slide, our goal is that 50% of our clients have at least one of these two products by 2024. I'm going to share how we plan to achieve that. First, let me talk about off-balance resources. As we have said before, we have done a very good job in terms of volume and pricing in off-balance sheet products. Our strategy for these products is based on two main approaches. One, improving our advisory model by providing further customer solution for every investment risk profile. Two, expanding our catalog with new products, such as megatrends or green funds. Regarding our strategy for insurance products for the next three years, our alliances with partners like Sanitas and Allianz will bring strong revenues.
Together, we are working on new customized products that really adapt to customer needs in terms of coverage and in terms of contract periods. Using business intelligence for a better approach to our customers that will allow us to offer accurate pricing and faster and leaner hiring processes. So far, I have covered our strategic lines for growth. Now, I turn to our second priority, having a differential value prop. We are convinced that advice is now the key to continue differentiating ourselves, the same way we did in the past when we led the digital transformation of the sector. Digital capabilities allow us to offer customer personalized, data-driven advice, 24/7. We have proof that our digital financial advice features are a key lever to increase our sales.
First, we are monitoring the number of transactions and interactions, and the time our customers spend in our app on a daily basis. As you can see, monthly interactions with advice tools have grown 30% in less than two years. This is key for us. Second, advice has a clear impact on customer loyalty. Attrition rate is lower and customer satisfaction is higher. Third, and most important, digital sales for customers using advice tools are two times higher than for the rest. Our goal is to seize the opportunity of every interaction through digital channels, transforming it into a successful sale, because the more our customers use our app, the higher our sales are. Lastly, I'm going to address the importance of operational excellence.
In this part, we will discuss how our relationship model has evolved in recent years and the importance of remote assistance in the future. We have here one of the most addressed topics in banking nowadays. You know perfectly well how technology has deeply changed consumer behavior across all industries. By the end of 2021, BBVA will have 1,886 branches in Spain, 43% less than in 2016. Evolving our distribution model has not just been a matter of closing branches. Our focus when defining how to interact with our clients has been, first of all, customer convenience, and second of all, increasing productivity, selling more. Remote assistance meets, in my opinion, both characteristics. BBVA Spain launched its remote model called BBVA Contigo in 2011, so by now we have accumulated very relevant experience and knowledge. This model has many benefits.
First, it's highly scalable. Remote managers can provide assistance and advice to larger clients' portfolio. Second, it is more convenient as Net Promoter Score indicates. We have made sure that our customers don't need to go to a branch, providing them with functionalities like remote signature of contracts through the app and online chat with managers. Finally, productivity is higher than that of traditional managers. All these figures lead to the conclusion that the evolution of the traditional relationship model is a great opportunity for growth. By the end of 2024, we intend to increase the percentage of remote sales force from today's 30% to 50%, and customers using remote service will almost double. I will now conclude with some key points from the previous slides.
First, BBVA Spain's focus on profitable growth, increasing our customer base, moving to a more profitable lending mix, and promoting revenue diversification. Second, this growth will happen while maintaining an efficient allocation of capital. Third, our distribution model will ensure the best customer experience through all channels, promoting productivity and scalability at the same time. Fourth, transformation is in our DNA. We will continue using technology to bring the best opportunities to our clients and to society as a whole. In conclusion, BBVA Spain has a successful track record and a consolidated strategy that lead us to commit in the next three years to a slight revenue growth evolving from less to more, to an efficiency ratio of around 45%, and to maintain our cost of risk below 35 basis points. With this slide, I conclude my presentation.
We have reviewed in depth the current situation of BBVA Spain and the future and the profitable growth that we are searching. Thank you again for joining us. I will be glad to address your questions during the Q&A. Thank you.
Thank you, Pedro. We have the pleasure to have Eduardo Osuna here with us, Mexico's Country Manager, who's going to give us a deep dive on BBVA México.
Good afternoon, everybody in Europe, and good morning, everyone in America. It's a pleasure for me to be here in this Investor Day. I will talk about these three topics: the macroeconomic environment, how BBVA México is leading the growth, and some financial landmarks, putting some data in our ambitions. Let me start with the macroeconomic environment. We have favorable perspective for Mexico. With a solid economic recovery, we are growing GDP and new employment, and we will have better growth for the next two years, reaching the levels that we had before the crisis in 2022. In terms of investments, we are recovering the growth in private and public investments, and we will still grow in the next years.
In terms of inflation and monetary policy, we expect to recover the levels of inflation around 3.5% for the next year, and we will maintain the interest rate at 5.5% in the next years. As you know, we have tremendous connection with the U.S. economy. Just two important data in terms of this relationship. We have around $40 billion remittances for this year, and as you know, we are the main partner for the U.S. in imports and exports. This is the main driver for growth in the Mexican economy. We have to talk about the social, geographical, and political balance. Last summer, we had elections in Mexico that gave us a very good balance in the Congress, supported by very solid institutions like the Central Bank and Electoral Institute.
We have multiple trade agreements, with USMCA being the main one. We have a privileged location because we are in the most productive region in the world. We have an opportunity to continue boosting banking penetration in Mexico. We will talk about certain population highlights. In the last 10 years, the growth has been almost 10 times the European growth. The mean population age compares very favorable with the European region. We have a huge space to grow the adults with bank accounts and digitize economy because we have a high use of cash. If we see the right part of the slide, we have a tremendous opportunity to grow the loans to the private sector. The reason for that level is the informal economy and informal employment that we have, and this is an opportunity to increase the banking penetration.
In terms of physical infrastructure, we have a space to grow when we compare to other economies. Let me proceed to explain how BBVA México is leading the growth in the Mexican market. Let me start with some highlights about our franchise. We have almost 25 million clients. We are the leaders in ATMs, but we have the second place in employees and in branches. That means that we use in a more efficient way our resources. We are growing our digital clients 30%, and this is the level of growth in the last years. Today, the digital sales is 70% of the total sales. If we talk about transactions, the change of the mix of channels is very impressive.
We have moved from 23% to 53% of transactions in the mobile and web, reducing significantly the transaction in branches. This is because transactions in mobile and web are growing more than 60% in the last year. Certainly, we are the leaders in almost all the markets. Leaders in performing loans with 23.8%, in customer deposits with 23.2%, in NPS with 664 points, and in brand power 29.1%. You can see the huge distance with the next peers in each of these indicators. When we talk about growth, we have to talk about our profitable mix of in business. In market share, we're increasing in loans and deposit in the last five years. We increase our leadership while the next competitor has reduced.
We have a better asset quality than the main peers and reaching better levels than they used before the pandemic. Our mix of business is better because we have more weight in consumer loans and less in mortgages and more in SMEs. When we see the mix in deposits, we have also better mix in demand deposits because we are the leaders in payrolls, cash management, and POS. We constantly transform ourselves to lead the banking industry in Mexico in the last 10 years. I'll then review these three factors that extend our position in Mexico. First of all, we are the larger and more profitable bank. Certainly, we can say that we are the people's bank, and we are the enterprise and government bank in Mexico. We are the people's bank outperforming in every product line.
We are leaders in credit cards, payroll loans, auto loans, mortgages, bank insurance, with a huge difference against our next peer. We can explain that because we have the best strategy in distribution of products and physical infrastructure linked to our digital offer that is completely different against our competitors. If we see our strategy for sustainable growth, to give you an example, we have opened 2.7 million new accounts this year, and 62% of those were through digital channels. We are growing in more profitable segments. To give you an example, we almost multiply by three i n the last 5 years the number of clients in affluent and private banking and multiply by two debit in this segment. The real data that shows our strengths in Mexico and our quality of service is our payroll market share.
We have 27 market share contracts, but 43 in amount of deposits. That shows that we are focused on the affluent segment. The other data that shows our capabilities is the market share that we have in the usage of debit and credit cards. We have 43% of the total transactions in the market, multiplying by 3 the total transactions in e-commerce. We are the leaders in e-commerce with 40% of the total transactions. When we talk about the insurance business, we have the second place in profits, market share in the total insurance industry, not just the bank insurance market. Growing almost 20% in policies comparing with the last year and taking advantage of our new alliance with Bupa. In just two months, we have 8,000 new policies in health products.
As we said, we are also the enterprise and government banks in Mexico. We are by far leaders in SMEs, large enterprises and government. The reason for that is that we combine our distribution network and our digital products having the best offer in Mexico for those companies. We are well positioned in corporate segment, leading DCM, ECM, syndicated loans and structured loans. Our growth strategy is giving results. Two y ears ago, being leaders, we rethink our strategy in SMEs, and this year we are growing almost 20% in new clients in SMEs and multiplying by 20 the new POS in this segment, in the low segment of SMEs. That's been because we are leveraging in end-to-end digital onboarding and in Openpay, our fintech focus on payments, especially focused in this segment.
In the middle size enterprises, we are increasing more than 50% the new products that we are selling to them, increasing in more than 3,000 customers during this year. The clearest evidence of our presence in the enterprises in Mexico is our market share in POS, having 1/3 of the total market, giving us the lowest cost of funding in Mexico related with payrolls too. Certainly, our market share in all products is explained by our unique value proposition, leading growth in innovation, a complete focus on financial and inclusion and sustainability. We have the best app in the market that give us a competitive advantage and the best experience for our customers. The metrics show it. When a client has the app, we say that they really live the BBVA experience.
We double the cross-sell, and we double the NPS, but we reduce the attrition by three. That's the real experience of being client in BBVA. We were the first bank to have digital cards for e-commerce. Today, 6.3 million customers use the digital cards, giving us the leadership in commerce and preventing fraud for customers and for the bank. This year, we launched the app for enterprises. In very few months, almost 300,000 are using the app. In the next months, we will continue increasing the services in the app, giving the best experience in Mexico for companies. We are promoting financial inclusion and sustainability because it is a tremendous opportunity to increase the business. We are the leaders in CoDi.
This is the QR launch by the central bank, having a huge market share, 61% in enrolled clients and 38% in transactions. We have products for young people, like the Link Card and cards for clients without credit history. We are focused on our sustainability priorities, leading the market in credit for retail, wholesale loans, and bonds. Certainly, we lead the efficiency in Mexico, having one of the most efficient banks in the world. We'll continue leading efficiency through operational excellence, and the best way to show it is looking at the last five years. We increased almost 90% the total transactions in the bank.
Today, having a better mix in the channels, using the digital products as the main channel, having more than 50% of total transaction, are giving us the opportunity to reduce our branches in 8% through a dynamic program to open and close branches, even as we are increasing the number of clients and having this opportunity of bancarization. Certainly, we are improving our efficiency using data and technology. Some examples of that, 77% of claims are solved in first contact resolution, and 38% of those are through the app, reducing costs in our claim area. We transform our ATMs in a device that service the customers. Just half of the transaction is for cash withdrawal. Using data and better platform, we increase in more than 23% the productivity of our RMs comparing with 2019.
The evolution of, you know, of our efficiency ratio is proof of our commitment to transform the bank, and we are ready to compete with fintechs and incumbents in the market. While we are reducing our cost-to-income, our competitors are increasing that cost-to-income. We're consolidating our profitable growth. This year, we are surpassing the pre-pandemic levels in profits. The performance is better than our competitors, increasing our profit market share to 34.5%, clearly above our loan market share. That difference shows our better asset quality and our efficiency, having the best return on equity in the market by far. Now, moving to some final remarks. In terms of our strategy, we have a clear strategic path around our purpose and priorities to continue growing in profitable segments.
We have a very good execution performance. Yeah, our transformation journey shows that. We are today leveraging in data and technology, improving the experience of our clients, and increasing the productivity in digital and physical channels. We have a unique position to take advantage of the market opportunities, at least maintaining the levels of market share that we currently have. For the next two years, our growth in revenues is growing close to double-digit. Efficiency in low 30s in 2024, and cost of risk below 300 basis points on average in the next years. Thank you very much for your attention, and it was a pleasure meeting with you in this Investors Day. Thank you, Patricia.
Thank you, Eduardo. Lastly, we are honored to have with us Recep Baştuğ, the Country Manager for Garanti BBVA.
Hi, everyone. This is Recep, country manager of Garanti BBVA. Let me start with the agenda. Firstly, I want to go over market dynamics in Turkey. Afterwards, I will be giving update on Garanti BBVA's competitive performance. Then, I will make the closure by addressing our strategy going forward. Let me start with market dynamics. Turkey is one of the rare economies that did not contract during the pandemic period. On top of that, economy showed a very strong recovery in 2021. We expect to close the year with 9.5% GDP growth. Meanwhile, Turkey faced high inflation like the rest of the world. It is unfortunately around almost 20%. During this period, TL depreciated more than 30% so far. These are the consequences of the short-term volatilities.
Beyond short-term volatilities, if we look at strength and a long-run view, Turkey's growth potential stands at 3.5%, significantly higher than Europe and relatively high compared to other emerging markets as well. Turkey has an advantageous geopolitical location. It is a manufacturing hub for Europe. Europe has more than 53% share in foreign trade in volume. Moreover, Turkey has very favorable demographics. 60% of the population is under age of 40, with median 32. Last but not the least, Turkish banking sector is very well-regulated, well-capitalized, and has a sound asset quality. More importantly, the market is still under-penetrated. Considering Europe average in terms of lending penetration and households indebtedness, there are much room to go. More importantly, 30% of adult population is still unbanked.
Let me continue with our performance compared to peers and our main competitive advantages that brings us our superior results. Most important product of the sector is TL lending, and we have the leadership among private banks. Looking at the last five years, our growth performance was significantly higher than private at 18% versus 14% of peers. We currently have 20% of TL lending market share among privates. We have the leadership in all retail product and also achieved increasing our presence across the board. We ranked as number two in TL business lending, where we closed the gap constantly and aim to take number one spot. Coming to how we fund our lending growth, we have the leadership in TL deposit with 19% market share as well.
More importantly, we are also leader in zero-cost TL demand deposit, which make one of the biggest contribution to profitability. We are growing, yet in a healthy manner with a sound asset quality. We have the lowest NPL ratio with 4% and highest NPL coverage among the peers with 77%. This is also a reflection of BBVA's prudent risk approach. Moving on to profitability. As seen in this page, we are by far leader in every profitability indicator. Our growth strategy is always focused on margins. We have the highest net interest margin in the sector. More importantly, our gap with the next peer is above 1%. We have an unrivaled leadership in fees and commissions for many years.
This year, we recorded the highest fee growth among our top rivals with 35% year-on-year with a gap of TRY 800 million. Finally, ROE is at 19.3%, significantly higher than peers. Our net income is TRY 9.1 billion, by far higher than the next peer. We single-handedly generated 25% of private banks' net income. It is one-fourth of private banks' total net income. Going forward, our main purpose is to continue maintaining the gap with our competitors. What are the key competitive advantages leading to such outstanding results? I would like to address under four main aspects. First one is higher network productivity and efficiency. We generated much higher banking revenue than our peers, TRY 20 billion versus TRY 15.3 billion over the next year. Also recorded highest growth during the last two years.
We have also a controlled OpEx base with more optimized network structure. As a result of these two components, our cost-to-income ratio is significantly lower than the peers, 34.1% versus 41.6% with the peers' average. Our improvement was 2.7% while they faced deterioration more than 2.5%. This success can be attributed to mostly our digital capabilities, our productivity, and agile organization structure. In addition to that, our banking revenue generation per branch significantly outperformed our peers, while we reached EUR 22 million per branch, peers' average is only EUR 16 million. Our second competitive advantage is our leadership in payment business system. We comfortably maintain our traditional leadership in card customer base with EUR 7.7 million. It refers to almost 27% of total card users in the market.
On top of that, we also have the highest merchant base with 400,000. In both issuing and acquiring business, we have reached highest ever market share this year. All these numbers are strong indicators of our dominance in payment system market. If we take a look how these figures reflect on income generation, we have been quite ahead of the old peers for many years. We have recorded TRY 2.8 billion net payment system fee income, much higher than the next peer. To sum up, payment systems is an important source of our sustainable revenue generation and customer acquisition. Our high-value verticals brings us an important opportunity for sustainable and profitable growth. Our subsidiaries' net income contribution notably increased in the last five years from 9%-17%.
Our subsidiaries give us the opportunity of growing in high-value products beyond lending and deposits, pension, brokerage, insurance, mutual funds. We have pioneer position in those as well, creating cross-sell opportunities and deepening our relations with the customer. Our third competitive advantage is best-in-class technology and digital experience. We have invested in digital channels since the late nineties. It enabled a better customer experience and carried us to the forefront. We have the highest digital and mobile customer base, 10.6 and 10.1 million respectively. We had a net increase of more than 2 million customers, and we have continued widening the gap with peers. Looking at the results of our digital migration effort, COVID period led the significant shift to digital channels. Number of transactions in digital channels grew by more than 89%. 97% of our transactions is now from digital.
Our market share in mobile financial transaction reached 19%. Digital sales share in total exceeded 80%. As a summary, digital is an important competitive edge for us. The last one is top brand power and excellent customer experience. On SMEs front, we are the most recommended bank. In individual, we rank as number two in NPS. We have the strongest brand power among private banks, thanks to our digital capabilities and best-in-class experience. With all these remarkable results and competitive advantages, Garanti BBVA is the most valuable bank in the country in terms of market capitalization. Moving on with our strategy going forward, we have been executing our strategy under three main pillars. First, let me start with customer growth. Our progress so far is already quite impressive. We have 20 million customers.
We acquire 1.5 million new customers annually, and more importantly, we make our customer base more loyal. Going forward, we see a significant potential in the market and want to tap up the unbanked population. We acquire customers mainly from these four product segment: credit card, payroll, general purpose loans, and micro segment, which are the most value-added areas for the bank. Credit card ownership doubles the customer profitability. Payroll customers constitute more than 50% of our new customer acquisition. It is also a key enabler for boosting healthy GPL and overdraft. We have leadership in number of card customer, payroll, and GPL. Our aim is to strengthen our leadership on micro front. Deepening our presence here will be a main priority. To achieve this, we have several key levers.
We will leverage our best-in-class digital onboarding process and will gain more customer E2E digitally. We are the most penetrated bank also in business segment, empowering us gaining more payroll customer. Loyalty focus action will support us to better penetrate and retain our customer. On top of customer growth, we will sustain our focus on volume growth as well. We have the leadership in retail lending, as I mentioned before. We will solidify our leadership in all retail lending products. In 2022, our aspiration is to gain the leadership in all key business lending subcategories. Our 100% geographical coverage, more productive network empower us in that sense. Our core net interest margin is notably higher than our peers, 3% versus 1.3%. It has been like this for a long time as a result of our sound balance sheet management.
We will keep that focus while growing. On top of that, in all asset quality indicator, we will sustain our prudent approach. Our supportive levers here will be AI-based risk model will enable a healthier and stronger growth. Leveraging digital capabilities and introduction of E2E commercial lending will support us, increasing our presence. Focus on boosting cross-sell will enable us to better penetrate our customer base. Let me continue with unique value proposition. As Garanti BBVA, we have a very strong reputation in sustainability. We are proud to be the first and only bank in Turkey to join Net-Zero Banking Alliance. Also, we are the first bank in Turkey that announced the coal phase out plan. We are leader in financing wind farms with 25% market share.
Going forward, in terms of sustainability, Turkey is one of the most attractive market in the world with a great potential. We will be focusing on introducing new innovative solutions, taking an advisory role for both our retail enterprise customer and for the authorities. Lastly, we focus not only environment, but also social side. We have been a strong supporter of Turkey's Women Entrepreneurs program for 15 years. Secondly, financial health and advice. We aim to establish long-term relationship with our customer and to become their trusted partner. With that sense, no other bank in Turkey has a real focus on this issue yet. We see this area to serve as an important competitive edge for us. So far, we have introduced new tools and features on mobile to improve our customer financial health.
A quick example, with bonus checkup, we transparently communicate reasons for card approvals decline and give tip for improvement. Additionally, we have structured our new communication strategy around financial health. Going forward, we will be focusing on introducing more personalized, proactive, impactful insight. Last pillar of our strategy is operational excellence. We have seen an outstanding improvement in cost-to-income, much lower than peers. We have steadily reduced our number of branches in the last five years with a dynamic assessment. Going forward, we will continue leveraging digital capabilities. In addition, our strategic focus will be optimizing our relationship model. We will benefit from remote roles more. A solid example would be enabling the centralization of operational branches role. Constantly, we are improving our business model with robotic process automation that enables us further efficiency in our processes.
We currently run 75 processes with RPA, and 84 processes will be coming to the end of 2022. I would like to wrap up with the key takeaways. We are by far the best bank in Turkey. We are the pioneer in digital capabilities and continue to invest more. We are the biggest retail bank in private. We have a proven track record of solid financial results. We achieved to generate the highest profit in a sustainable way. Our profit generation capacity has always overcompensated currency depreciation when the economic environment was volatile. Looking ahead, we will be focusing on sustaining by far leadership in profitability without compromising risk focus, advancing in operational excellence by leveraging digital capabilities, offering unique value proposition.
Our ambitious goals for the next three years, increasing our revenue generation by high teens% annually, maintaining cost-to-income ratio at low thirties%, delivering cost of risk below 150 bps. This is the conclusion of our presentation. Thank you for your time.
Thank you very much, Recep. Now it's time to answer some more questions from the audience. Firstly, some questions for Peio about BBVA Spain. The analysts from RBC, Alantra, Barclays, Sabadell, and JP Morgan are asking about expenses and if we can expect another restructuring plan over the time horizon of the plan, and of what magnitude it is included in your cost-to-income target of 45%.
Yes. I'm going to switch to Spanish if you
Yeah, that's fine.
in the questions, okay?
[Non-English content], Patricia. Thanks very much, Patricia. As regards costs, I'd like to start off by saying that at BBVA Spain for years now, we've been working hard on a very clear assumption. That assumption is and was that we were going to have an environment of low interest rates during a long period of time. For this reason, as we have seen in the presentation, for us, the priorities are very, very clear. We need to change the mix towards those more profitable products and segments first. Second, we need to diversify revenues in terms of fees, and we need to grow in off-balance resources. We need to grow also in insurance. Third, we need to be extremely efficient. What do I mean by this?
Well, what I'm trying to say is that we've been working for some years along these lines, and as I have explained in the presentation, we have reduced the cost-to-income since 2016 by 20% to now. We are trustworthy, we are reliable, we are consistent in terms of cost reduction. We are a bank that is very predictable in this sense. We are highly consistent. Going forward, our aspiration and our commitment vis-à-vis 2024 is to have a cost-to-income ratio of around 45%. But the truth be said that, of course, in terms of costs in the year 2022, we're going to see the impact or most of the impact of the restructuring carried out during the second half of the year 2021.
and 2024, in principle, we're not envisaging further restructuring. What we do envisage is that track record that we have demonstrated since 2016, and therefore consistently, we will continue to reduce the costs in the year 2023 and in the year 2024. Thanks very much, Peio.
Francisco Riquel from Alantra is asking, "How sustainable is the growth in the consumer lending segment for the coming years?
Well, uh, y-
Well, we're seeing in the presentation, we have grown over the years 400 basis points in terms of market share in the consumer lending world. This has been possible by knowing our customers and proactively in a very lean and digital-oriented manner, offering them loans. Of course, with a sound and robust risk monitoring, as you can see, considering the cost of risk, we have. What have we done? We have grown in terms of the number of clients that we know sufficiently well in order to be able to proactively offer them a loan.
With great monitoring, great learning, great know-how, and I'm saying this with great humility, but we've tried to improve that conversion funnel, and therefore we have improved what we call the conversion rate. What we have been able to accomplish over the past years is to increase the scope of pre-approved credit clients and to improve the funnel of conversion. We've been doing this over the past five years. That's. We have grown by 79% considering the credit card balance sheet. We always took great care of risk. Had we not been doing this in this manner, we would have seen a very clear impact. Knowing customers well allow us to maximize the volume and price.
We need to be able to acquire customers, offer customers the exact price, where depending on the profile, we're going to be able to offer them customized, tailor-made products that are highly attractive to them. Over the past three years, the idea is to continue working along these lines, and we believe that there is great wide space for growth. Because we have the knowledge of our customers, we're going to leverage on data, and we're going to offer them convenience, and we're going to maximize risk considering the different profiles.
Britta Schmidt from Autonomous Research is asking that, given your ambition to change the business mix, how realistic is an under 35 basis points cost of risk?
In terms of cost of risk, of course, 2020 was an extraordinary year, and we had some one-off provisions or extraordinary provisions because of a very high level of uncertainty stemming from the pandemic. It was a very high uncertainty level. Now we're talking about, well, we're in November 2021, and we can talk about what we have experienced over 2021. In terms of risk management of the business of usual, well, we see clearly that the new, well, entries into default and early maturity in those cases, the figures are very good in terms of NPLs and early maturity. They're very good for retail and also for corporate. We see this in retail across the different products, and this is a very positive piece of news.
Another very positive piece of news of 2021 is that last year we had a moratoria for mortgages and consumer, and as you know that we stand at 5%-6% of the overall volume that we have for these two portfolios. During 2021, we can say that all those moratoria have matured, and the payment behavior that those customers are having today is being very, very good. These are very positive news. Other positive news. The economic forecast. I meet businessmen often, and they are optimistic. Of course, the European funds are also good news. It's also very positive that the sector that was severely hit by the mobility restriction was, that was most affected, was the tourism sector.
Prior to 2020, the tourism sector had excellent results, so they had a good situation in terms of solvency and liquidity. Considering all these things, I believe that we can be optimistic vis-à-vis 2022. It's true that in 2022, we will have the maturing of part of the ICO loans. We need to be cautious and monitor them. Some have matured this year and are behaving well. Considering the economic forecast and the European funds, we believe that there will be a good performance and good behavior in the year 2022, when the remaining loans mature. We are cautious as a bank, and both in 2020 and 2022 have done PMAs, and therefore we feel comfortable vis-à-vis 2022.
Therefore, in short, since the change of the balance sheet in terms of mix has been undertaken over the past five years, and we find ourselves that in September we have 32 basis points of cost of risk. Considering the perspectives going forward and what the situation was in 2020 is very different to the one we have today. There are reasons to be optimistic, and we believe that we can meet the commitment of being below those basis points on average, the 45%, with that balance mix always promoting high profitability. Thanks very much, Pedro.
Eduardo, regarding the BBVA México, Morgan Stanley asks about the outlook for volumes growth in the corporate segment and business mix. Commercial lending in Mexico had been weak prior to the pandemic and remains so in 2021. What are you expecting in your business plan for 2022, 2023? How do you see the loan mix evolving? How will this impact the mix and margin?
We see a change in the mix. 50% of the portfolio is in retail and 50% is wholesale loans. This is a trend that we have had in the past years that had recently changed, and we will go back because of the lower demand in the commercial sector. I think we need to refer to three things to explain this. There is a benchmarking problem or a comparative problem, also a problem of excess of liquidity of many customers, and also problem of demand. In terms of the comparison, during Q2 last year, we saw that many customers were having well lines that they prepaid when they saw that the liquidity of the market was going to dry up. We have seen that problem when comparing the peak of the portfolio stock as compared to July 2020.
Second part of the explanation is that we have had many issuances of corporates in the market, many of which have been placed by us. These placements, well, make the most of the international liquidity. What we see is that this has helped us prepare our balance sheets, and there's a double effect that has had an impact on the commercial side. We see that there's a lower demand in investments since the end of 2019. What we see now is a recovery of short-term loan. When there's a fall of this nature and a change in trend in the economy like the one that we have laid first, what we have is short-term loans in order to generate more working capital in companies.
Once the cell capacity of the companies is there, we start seeing a greater long-term demand. What we start to see now is a greater longer-term demand. If we analyze the growth situation now as compared to the beginning of the year, we start to see positive signs, particularly in the mid-size market and the commercial segment. We hope to have a real recovery because of the greater investment on behalf of companies. As for the impact on the margin, with this change in the mix, we're having more retail as opposed to wholesale, and we are, well, more or less offsetting the effect on the margin of the change in mix. We've been doing greater pricing management and acquisition.
Because of the excess of liquidity of the market, lower consumption, and lower investment of the companies, we were able to manage prices very well in terms of deposits, and we were able to reduce the cost, and this allowed us to offset the margin for wholesale credit.
Mario Ropero from Bestinver asks about the expected trend in both top line and fees. In the same line, Britta Schmidt from Autonomous Research asks, "What are the opportunities in insurance and fee income growth that is implied in your targets? Do you plan any new investments over the next three years, or will you leverage BBVA Group capabilities?
As regards the evolution of fees in the banks, it's been nothing short of spectacular. It's a double-digit growth because of a series of reasons. The level of issuance of credit cards stays very high. We are placing 1.2 million new credit cards, and we are acquiring new market share in the credit card market, almost 800 points above the next competitor, as explained in the presentation. We are increasing our relationship with clients. I shared some figures regarding the growth of POSs, and we are very much working on transactionality and the issuances in the market, the bond and equity market. What we have seen is that at some moment last year, we had few transactions. There was an increase in the number of transactions. There were debt issuances and this.
Now we're growing around 15%, and we expect that figure will remain stable in the future. This has offset the decrease in unit fees for some products that are digitally native. We've been able to offset the fees, and we hope that going forward, we will be growing in double digits in fees. As regards insurance, I believe that they represent a huge opportunity in the Mexican market. When we talk about a lack of penetration, the opportunities for bancarization, the least penetrated product in the Mexican market is insurance. We have plans and strategies for insurance, and we have a plan for the next three or four y ears. We want to multiply by two our market share in car insurance.
We were leaders in loans for cars, and we believe that this is a huge opportunity. Together with our alliance with Bupa, we see that there is sustained growth in the business of insurance. We have grown significantly in the number of insurance policies underwritten over the past four or five years, double-digit. We have grown in the number of new policies, better quality of policies. We've been able to ensure client retention. Double-digit growth for almost all the insurance segments, and this is one of our greatest opportunities going forward. This will allow us to improve the productivity of our managers. We see that we are transforming the sales force. Many of the sales are in digital. There's still a, you know, wide space for growth.
Insurance products are hard to sell, and we are upscaling our sales force so that they can sell insurance. This productivity has increased by 23%, as I have explained earlier.
Yes. Stefan Nedialkov from Citi and Francisco Riquel from Alantra have some questions about the outlook for the asset quality and cost of risk in Mexico. How do you see asset quality evolving over the next few years? What assumptions are considered in your cost of risk target? When do you expect to release COVID-related provisions?
I must say we have the best cost of risk in the system. You've seen the data, and particularly product by product. Now, one of the greatest surprise post-COVID has been the evolution of our portfolio. It's been evolved very positively, and that talks to several things. First, the very prudent origination pre-pandemic.
No crisis will withstand poor origination. If you're not originating well in a change of cycle, the shift in the cycle, it will affect your portfolio. We're doing this very well. We were working actively to manage our risks cautiously pre-pandemic. Across banks, led by the Bank Association, we all made an effort, in a very timely fashion, to support our clients. We supported over 9 million clients. We supported 1.5 million clients, so 25%-30% of the portfolio, depending on the product, to give liquidity to our clients. Our main goal was to support them so that we would have still a portfolio to lend to after the pandemic.
Once the support after the pandemic was over, we launched several other projects or products to support them, particularly in wholesale. Our clients responded beautifully. They wanted to maintain their credit bureau clean, and they kept on making their payments. Thanks to that, our indicators post-crisis were better. The new vintages right now they are in a better condition than what we originated pre-pandemic. This means we're using data better, we understand the markets better, and we work very closely with our clients. Another one of our goals is to stay below 300 basis points in terms of the cost of risk, and that includes the mix, the portfolio mix that we are talking about today.
Well, clearly this is going to give us a huge boost in terms of the market share and the profit, because that's going to help us be a lot more profitable. We do see a very good progression, a very good trend with all of our products. Thanks to that, the cost of risk is the best we've had in the history of the bank in Mexico.
Recep Baştuğ of Garanti BBVA, Francisco Riquel from Alantra and Daragh Quinn from KBW ask about guarantee CET1 ratio sensitivity to the Turkish lira-U.S. dollar fluctuation.
Okay. First of all, I would like to start with our emphasis on FX about foreign currency portfolio. We have been decreasing our portfolio, I think, much more than everyone in a speedy way. During the last 4-5 years, roughly 45%, we have decreased our portfolio. We are aware that there is a danger. Its impact on our CET1 ratio, it is very simple. 10% devaluation has 35 basis points negative impact on our CET1 ratio, which means that today our CET1 ratio is above 17%. We have very comfortable headroom with those levels.
Thank you, Recep. Mario Ropero from Berenberg, Daragh Quinn from KBW, and Stefan Nedialkov from Citi, and also Ignacio Ulargui from Exane ask about the expected NPLs evolution and how could the cost of risk be impacted in the case Turkish lira continues depreciating.
Again, I will start by giving our NPL numbers. It's around 4%, and our coverage is 77%. Also, we have set aside very strong provision amount for these type of issues. There is again very simple linkage between NPL level and the devaluation. The 10% devaluation creates 18 basis points negative impact on NPL. There won't be same issue with the cost of risk, because as we allocated strong amount of provisions, its impact on the cost of risk will be negligible. What we announced today, 150 basis points cost of risk during the last coming three years, it is applicable, and it is the answer of this question.
Thank you, Recep. Now Carlos Cobo from Societe Generale ask: what do you expect the cost of the Turkish lira foreign exchange swap to be in 2022-2024?
Today, the main swap access for Turkish banking system is the central bank. The cost of swap is around cost of deposit.
Mm-hmm.
I don't know what's gonna happen to cost of deposit in 2024, but it will be very close to cost of deposit level.
Fine. Now Carlos Peixoto from CaixaBank and Ignacio Ulargui from Exane: can you share your views on the monetary policy adopted today by the Turkish central bank?
Today, 100 basis points rate cut as expected. The central bank came to the end of easing cycle as I see. They will likely watch the developments in the world, in the country as well. Regardless of the issue, I try to explain the bank's performance in this volatile environment. I don't see any problem with Garanti BBVA's financial situation.
Thank you. Going back to Peio, Mario Ropero from Berenberg and Francisco Riquel from Alantra are asking about commercial loan growth for the 2022-2024 period, and the impact of the Next Generation EU funds embedded in your business plan.
Thanks, Patricia. We all know that the NextGen hold a great opportunity for Spain. It will change certain structural shortages that we have at an economic level. In the short term, they're going to radically change the economy and employment. According to BBVA Research, the impact of Next Gen will have an incremental impact of 1.5 points GDP growth over the next few years. Now, part of that increase we thought was going to take place in 2021, but it has slid back to 2022. Now, in incremental terms, incremental business terms, well, this is hard to quantify. The impact of the Next Gen funds might be beyond a 10% incremental impact vis-à-vis the average billing with the enterprise, and that would have a 1.1% positive impact on the balance with enterprises.
Now, these are just numbers, forecasting. It's really hard to know what's going to happen. What I believe, and the sector in Spain is very excited about, is that there are some specific terminals, verticals, or programs of Next Gen for Spain. I would say that there is a clear overlap with what I've shared in my presentation and Javier and David have shared earlier. Now, what does this mean? Well, internally at the bank, we were already creating the teams, the value propositions, the industrialized offering for certain segments in a more tailor-made fashion based on agreements with partners around sustainability, energy, and retrofitting. I insist, these are vertical programs, and they're very significant as part of Next Gen Spain. That's what I believe that as part of the opportunity, we are going to play a key role.
Marta Sánchez from Bank of America, Francisco Riquel from Alantra, Gonzalo López from Redburn are asking about what interest rates and ALCO assumptions are you considering in the NII outlook for 2022, 2024. What is your NII sensitivity to interest rate hikes?
Thanks, Patricia. Well, I mentioned this earlier. For a few years, we've been working under the premise that low interest rates were here to stay for a long time. For the next, well, three years, we remain cautious. The Euribor 12 months on average will be at negative 49 basis points in 2021. What we foresee going forward when working on our business case, we're considering negative 48 basis points in 2022, negative 41 in 2023, and then an improvement in 2024, when we would go to negative 21 basis points on average. Only later that year, we would see positive figures for the Euribor. That's how we've built the NII and forecast for the next three years. Now, what's our sensitivity? Still, we're very cautious.
I'll say that a 10 basis point improvement to the Euribor has an incremental impact of EUR 70 million on our NII. I insist, being cautious. The truth is that because the mortgage portfolio weighs heavily in our portfolio, any hike to the interest rate will positively affect us. Our mortgage portfolio, for the most part, is at variable rates. We review that regularly, and we would be favorably affected by a rate hike. Then in terms of the ALCO portfolio, we're at around 27 million ALCO portfolio. The way that this is built, over the next three years, we want to keep it flat and replace the maturities as they come up.
Fernando Gil de Santivañez from Barclays is asking if you consider 13% market share in Spain adequate.
Right. That 13% market share we've shown in our initial presentation is based on the total assets figure and the Bank of Spain market share. Let me explain that in more detail. Those shares are calculated based on credit card. That's ninety billion mortgages, some EUR 500 billion, and enterprise. They aggregate from the smallest SME to the largest corporate, and they represent some EUR 500 billion more. That plus public institutions, we represent 13%. Now, when you go into the details, and this is public information offered monthly by the Bank of Spain, you will see that in mortgages, our market share is 14.6%. In consumer loan and credit cards, we have 14.8%, and we are constantly growing every year.
If you look at the whole of the enterprise business, we're at 11.8%. As part of that 11.8%, there are some segments or sub-segments where, well, our market share varies. That 13% is a number that it must be individualized. If you look at payroll, we have 15%. In mutual funds, we are north of 16%. Pension plans, we are at 19% roughly, also according to Bank of Spain figures. We need to make this relative, looking at our installed capacity market share. It is true that there are different restructuring processes right now, and we should wait a few months for these to consolidate, but BBVA should be at around 11% of the market share.
All is said and done, once you look at the P&L, when you look at the different lines in Mexico, and you analyze the market share in attributable profit and fees and NII, the market share in costs and everything, you come to the conclusion, as you've seen on that slide in my presentation, that we need to look at the evolution of profitability. We're happy with the return and the profitability that we have on our capital at the current, in the current times in Spain.
For Eduardo. Britta Schmidt from Autonomous and Ignacio Ulargui from Exane ask about expenses. Do you expect cost growth to track in line with, above or below inflation?
The investment we've made in distribution model and the transformation of the distribution model and tech platforms have enabled us to translate that into efficiency. These transformation in our customers' habits have meant lower cost-to-income, lower unit cost of transactions, and we have a super ambitious transformation plan of our back office, and we've been linked to inflation. Now, this year and the next will be above inflation, definitely. First, because of an issue with the comparison of the variable pay and an issue we had last year, and also because we have COVID-related one-off costs, and also because of the significant expansion in our Openpay capabilities and the expansion in Latin America. Once we execute that, we will be going back to growing costs alongside inflation.
From Morgan Stanley asks, we have been talking about the opportunity of banking penetration in Mexico for 20 years. What do you think is needed to make it happen?
Well, we've been talking about it, and it's been a reality. We wouldn't be growing in number of clients and number of loans. It's not just BBVA growing, the entire system is growing. Clearly, there are two reasons why we are consolidating the opportunity. First, because the digital transformation allows us to distribute products better and reach out to all regions of the country. Unit costs are better for the low segments. Also, there is significant growth in the country. Don't forget that in 1994, the lending to GDP ratio were at 40%. Twenty years after that, we've gone back, but the country basically deleveraged for the next ten years from 1994 to 2004. Banks went bankrupt, and it took this long to rebuild.
Nevertheless, the balance sheet in the bank is much healthier and profitable than what we had right before the crisis. This is a reality, and clearly what can drive banking, expansion of banking services further is fighting informal employment and the informal economy. This is something we've discussed with regulators and some very specific strategies that can be executed. For example, how can we fight cash? We're working with some regulators on that, particularly the central bank, and that can speed up the transformation. Clearly, digitalization is a fundamental pillar to accelerate this reality, which is there, and we see it in the results. Thank you very much, Eduardo.
Asks about the impact of BBVA México's growth on competition. How large can the Mexican franchise grow without causing any issues related to competition?
That's a great question. First, I must say that we have great size compared with the competition. If you look at the competitors, well, we're below other financial markets in the world in terms of penetration, but as we improve our distribution capacity, improve our service to clients, and we continue to be price competitive, our market share will continue to improve, provided that we do better than the rest. This is good for the American market and definitely good for regulators. As we are better than the system, our market share will continue to increase. That's a rule in all markets and industries. Some industries have larger concentrations in terms of players, and our main focus is on improving the service, the products, our distribution capacity, and clearly leverage this opportunity to extend banking services across the country.
For Recep Baştuğ on Garanti BBVA, what is your strategy regarding FX lending? What impact would increased dollarization have on your business, and how do you intend to manage this?
Our strategy is very simple. As I tried to explain, we have been decreasing our foreign currency portfolio, so it will continue. Every year we have been decreasing it much more than the sector average. This will continue. The second one, today, small companies, small commercial companies, are not allowed to use foreign currency lending. In a country wise, it has been coming down. It will continue to come down. Impacts of this dollarization on this business, it will be negligible effect because we used to have the portfolio foreign currency loans in the balance sheet. It was 50-50 with TL foreign currency. Now it is 75%-25%.
We are growing in TL terms, which was much more profitable than the other products, as I tried to give the numbers in my presentation. This 25, I hope, will be 20-15, so it will be very smaller part of our balance sheet. Its impact will be negligible because we make a very strong transition from foreign currency to Turkish lira. We are playing this game on Turkish lira side.
Thank you very much, Recep. One final question for Peio. Nuria from Renta 4 asks for more color on revenues.
Gracias, Patricia. Thanks very much, Patricia. Well, we're going to grow by growing in customer acquisition, as we have done to date. We are well above our market share in terms of growth and customer acquisition, and this isn't only related just to having an attractive offer for new clients. This is very much related to having a great onboarding process and an experience in funnels and in conversion, and we have been working on this for years already. That's not easy, not at all. You can't do this overnight, so therefore, there is a growing trend. As I have explained earlier, we're going to continue working along this path in the next years. We need to make sure to link these new clients during the first six months after they are onboarded to the bank.
We need to enhance the engagement of the clients, and we need to attract them to the more profitable products, credit cards and consumption products. We're putting our efforts around there. In the presentation, we saw the product mix that we have prepared. We have grown in consumer loans. We have grown in SMEs. If we consider the past five years, we have grown significantly in consumer SMEs. In cards, we grew by 7 percentage points. As regards mortgages and public administration, we have decreased by eight points. I also talked about fees and the white space there. My colleague was explaining the potential in Mexico. We can penetrate with specific products like funds, insurance. We believe that there's great potential to be unlocked.
We have progressed a great deal over the past years, and we will continue working along these lines. I'd like to underscore another thing that obsesses us, which is profitability. Profitability per product, per segment, and profitability per client, if I may dare say. This is very clear to us. This is a priority for us, and I believe that this can be clearly seen in the evolution of the figures over the past two quarters in Spain. We are outmatching our peers. I'm optimistic because honestly, I believe that we have clients where we can penetrate much further.
Eduardo, Recep, thank you all for joining us today and for all your questions. As always, let me remind you that the entire IR team remains at your disposal to answer any further questions. Now, I would like to turn it over to our Chairman, Carlos Torres Vila, who will deliver the closing remarks for this event.
Thank you, Patricia, Lalo, Recep, and Peio. Thank you all for being with us today. We have covered much during the day, so I will be brief. After two difficult years, the world's economy is recovering. It's on a growth trajectory, but also with inflation and rates on the rise. We're also witnessing an unprecedented wave of innovation and technological development, an age of opportunity. We are facing the decarbonization challenge, a big disruption, which is also an opportunity. All of this change will have deep repercussions across sectors. Against this context, BBVA is uniquely positioned. We own leading franchises in very attractive markets. You have heard it from Peio, Eduardo, and Recep, how strong we are, how we will further grow profitably.
Our edge as trendsetters in digital and sustainability. Helping our clients improve their financial health, supporting them in their transition to a sustainable future is at the heart of our value proposition, as David and Javier have explained. Our difference of culture and mindset, pioneer mindset, this has allowed us to lead the change in our industry to bring the edge of opportunity to everyone. Our proven track record of solid financial results, our disciplined strategy on capital allocation, and our excess capital. This enables further profitable growth in our core markets, further return of capital to shareholders, not only return on capital, but of capital to shareholders. Today, we announced our new dividend policy. We raised the payout ratio to 40%-50% of our net attributable profit with cash dividends and potentially buyback component.
We will also immediately begin the execution of our EUR 3.5 billion share buyback program as early as next week, early next week. We will start executing the first tranche for an amount of EUR 1.5 billion. This will be executed by an external third party. It will not be subject to any price limits, and we expect it will be completed within the next three or four months. Leveraging on these strengths, as explained today by Onur Genç and the other colleagues, we will work on our six strategic priorities to become a larger and more profitable bank, a distinctive bank for our clients through a unique value proposition, and we will continue to lead in terms of efficiency and operational excellence.
Beyond the strategies, we have also set very ambitious performance targets, long-term goals to 2024, 42% cost-to-income, 14% return on equity, 9% annual growth in tangible book value per share plus dividends, 10 million new target customers, and EUR 200 billion in sustainable finance. All of this maintaining our core equity tier one target in the range of 11.5%-12%, and we remain committed to operate with no buffer over this range. We hope you like these goals, and we hope also that you have enjoyed our Investor's Day, that the sessions have been useful, that they have provided you a better understanding of our strategy and our goals going forward. We very much appreciate your interest and questions during the day.
Our investor relations team is at your disposal and would be delighted to follow up with you on any further questions you may have. Last but not least, I would like to thank Patricia and her team and everyone who has participated in organizing this for their hard work to make this Investor Day possible. Thank you.