Good morning, everyone, and welcome to Bankinter Fourth Quarter 2021 Results Presentation. Our CFO, Jacobo Díaz, will guide you through the presentation, and we will follow up with the usual Q&A session afterwards. Thank you.
Good morning to everyone, and welcome to Bankinter's Earnings Presentation for the Fourth Quarter and Full Year 2021. The related financial statements were posted on the website of the CNMV before market opens. All documents can also be found on our corporate website. Let me start with a view at a glance of the main achievements obtained during 2021.
It has been a record year in commercial performance, with individuals driving volume growth in balance and off-balance sheet products and services, becoming the driving force of the strong growth in our pre-provision profit up 14%, all this together with a maintained solid asset quality and capital levels. Even excluding the impact of the segregation of Línea Directa, we have been able to post a strong growth in our net profit.
We view this as a remarkable performance in a particularly challenging year, and with interest rates at the bottom for another year. Having said that, we are fully committed to achieve our 2023 targets, pursuing the net income of 2019 when Línea Directa was part of the group. Let me be more specific about 2021. We have been able to close the year with continued growth in our loan portfolio despite the stability of the corporate loan book and a limited consumer finance activity in most part of the year.
This has been somehow offset by strong mortgage production all year around and in all geographies. Also, retail deposits and assets under management, the largest contributor to the growth in recurrent fees, continue to post a stunning growth in the size of our businesses, mainly thanks to the strong customer acquisition in an unprecedented year.
Second, the resilience shown in our net interest income through the year and the increased growth rate of our fee income resulted in an increase of our operating income by close to 9% and above our guidance at the beginning of the year. Third, since the year has been good in income growth, as we have always anticipated in previous guidance, operating costs grew clearly below our incomes.
That is slightly more than our beginning of the year guidance, mainly in this last quarter, with a seasonal increase in personal expenses due to the second half year variable pay linked to our strong commercial and financial performance. Despite this, improved efficiency has allowed pre-provision profit of the group to grow strongly by 14% year-on-year, well above last year growth and our beginning of the year guidance.
Fourth and final point, asset quality continued to show stable NPLs in the year, with a reduced NPL ratio and increased provision coverage from last year. Our solvency maintains comfortable levels of CET1 above 12% despite a small reduction in Q4. These are the key financial indicators for 2021 comparing with 2020 and 2019, as we've shown in previous presentation.
Group's total loan book grew 6% to EUR 86 billion thanks to the strong mortgage production in all geographies more than offset the slowdown in corporate and consumer loan book growth. Loan growth from September 2021 is close to 4% or EUR 2 billion. Gross operating income at EUR 1,855 million grew by 8.6% with respect to last year and by 12.5% from 2019, showing improved resilience in incomes coming from a customer recurrent business.
We firmly believe efficiency and thus operating costs remains under control, making possible one more year pre-provision in profit trend to improve growth rate to 14% from 4.5 last year, reaching EUR 1 billion new record. NPL ratio came down in the year in line with our asset quality indicator at 2.24, helped by the usual reduction in the last quarter from the sale of NPLs in consumer finance. Coverage ratio after the extraordinary provisions of 2020 has kept growing, reaching a comfortable 64%.
Group's net profit reached a record of EUR 1,333 million. Like for like, that is excluding the Línea Directa transaction, net profit would be EUR 437 million, growing by 38% from a year ago and only 11% below that of 2019 with full Línea Directa contribution and excluding EUR 57 million extraordinary goodwill from the EVO Banco acquisition. Our CET1 fully loaded capital ratios remain above 12% at 12.1%.
Even with a 50% dividend pay and the Risk-Weighted Assets growth in the last quarter, it stands 24 basis points below last year and well above our long-term guidance of 11.5%. Our return on equity, adjusted by the extraordinary income, reflects the improved performance of the year and stands at 9.6, three full points ahead of last year and again above cost of capital. We now go through the usual agenda of our presentations. First, our full year and Q4 results, then risk management, to end up with a brief review of the different business in 2021.
Moving on to the full year income statement and with the last quarter, with no extraordinary items of size apart from their Deposit Guarantee Fund annual contribution, the group's income statement shows strong growth in all revenue lines. Net interest income maintains its growth trend after a quarter with more positive seasonality, particularly in corporate business. It is up by 2.3% from December 2020.
A positive financial markets environment and a strong commercial activity supports our fee income. It grew by 21.5%, excluding the Q3 one-off in extraordinary fees from investment banking. Growth would be 12.4% with respect to the previous year. Other operating income and expenses at EUR 23 million were EUR 11 million lower than a year ago due to good trading and dividend income in the year. Total gross operating income at EUR 1,855 million went up almost 9% from 2020.
The diversification of this income remains very high, with increased contribution from Portugal, EVO, and Avant Money, and from our investment banking business, as we will see later in the presentation. Group operating cost, as we have been anticipating in all previous presentations, went up below income growth, despite the seasonal fourth quarter increase, mainly in personal expenses, as we will explain later. We firmly believe they will remain under control in Spain, Portugal, and Ireland for 2022, and of course, 2023.
Group's total cost grew in the quarter, mainly due to personal expenses that went up in the second half-year variable remuneration after a good year in commercial activity. This very positive income and cost performance makes PPP to increase by 13.9% above the growth rate of 2020 and 2019, and we think this is a remarkable performance. Loan loss and other provisions went down 28% from 2020, mainly due to the EUR 243 million extraordinary provisions booked in 2020.
Without this effect, the provision of NPLs increased in line with our reviewed forecast for the cost of risk of the year. Like for like that, excluding the front loading provisions, it went down 23% in line with our guidance for the year. After taxes, group net profit excluding Línea Directa spin-off were EUR 437 million, 38% up and only 11% down comparing to 2019, excluding the bad will. Adding the positive result of Línea Directa spin-off, total net group reached historic record of EUR 1,333 million.
After closing what we think is a very positive performance in the year, we continue to feel optimistic and see 2022 as a challenging year in our way to recover the pre-COVID and pre-Línea Directa spin-off group net profit by 2023. On a quarterly P&L comparison, we can see continued resilience in our net interest income, almost flat year-on-year and with 1.4% seasonal increase in the quarter. A very positive growth pattern in fee income, up 16% with respect to last year, and almost 10% reduction from previous quarter extraordinaries.
Operating costs increased by 7%. Pre-provision profit shows an increase of almost 10% with respect to the same quarter last year, and a reduction from the previous one. After credit risk and other provisions, net income excluding Línea Directa has been EUR 82 million, 15% down in comparison to previous year, same quarter, and down from the third quarter of 2021 due to the extraordinary fees and guarantee fund annual charges booked in the third quarter.
The group's loan book grew by almost 6% from a year ago, bringing over EUR 3.7 billion in new net loans to reach EUR 68 billion. Growth in the year have been driven by our mortgage business in every region, Bankinter and EVO Banco in Spain, Bankinter Portugal and Ireland, Avant Money. After a very weak third quarter in corporate lending during the last quarter as every year, working capital activity has improved, and our loan book grew by over EUR 1 billion in the quarter to end the year almost flat.
Consumer loan books start growing again by close to 7% in the quarter, mainly in personal loans in Spain and mortgages in Ireland. In Spain, thanks to a strong mortgage lending production, growth in the year has been 3.9%, always gaining market share since the sector has contracted by 0.3%. In Portugal, lending is up 4% from a year ago to almost EUR 380 million to reach EUR 6.9 billion and in line with our business plan. EVO was also able to grow their loan book by EUR 635 million year-on-year, thanks to strong mortgage production.
Retail deposits continued to perform strongly in all geographies, growing 11%, bringing EUR 7.5 billion to reach EUR 72.5 billion as a whole. More important, close to 75% of this growth comes from new customers of the bank. Deposits were up 11% in Spain, while the market grew by 4.8%. Net interest income continue to show the positive trend of the last five years. It grew by 2.3% over a year ago and 9.2% from 2019.
This clear net interest income resilience is a consequence of being able to grow our loan book every year while maintain customer margin, as we can see in the right-hand side chart. I will emphasize the contribution of EVO that stands at EUR 27 million and growing 4% in line with its business plan. Also, Portugal net interest income grew by 5% due to the loan book growth in all our activities. Finally, in Avant Money, our net interest income reached EUR 53 million, growing at 6%.
As for the quarterly customer margin, it increased by 2 basis points from previous quarter and is only 2 basis points below that of the previous year. All this is reflected in the yearly customer margin with only 6 basis points drop in 2021, improving 13 basis points reduction of 2020. Credit yields dropped 8 basis points, mainly due to the lower repricing, a shift in asset mix with more mortgage growth than corporate and consumer lending in the year. At the same time, our cost of deposits dropped 2 basis points at the low end of interest rates.
This cost does not include the remuneration charges of institutional and large corporate clients in the year. For 2022, we will finish the impact of the negative repricing on the variable rate loan book, mainly mortgages. At the same time, we would start to see some asset mix improvement with corporate lending, improving growing trend and consumer finance growing again in less risky personal loans.
Moving on, the ALCO portfolio remained almost flat in the year. The portfolio's metrics remained strong with an average maturity of 8.8 years, with an average duration of 4.5 years and an average yield of 1.7. After another stable years, unrealized gains of the portfolio amount to approximately EUR 430 million, less than 20% of them on the fair value portfolio with limited impact in capital. The next few years, maturities of the portfolio are minimal, except for 2023, where EUR 1.1 billion will amortize or manage to renew.
Next, moving into fees. Fee income enjoyed a very strong performance and ahead of our guidance for the year, amounted to EUR 603 million, even excluding the extraordinary fees of the third quarter . It went up by 12% to EUR 603 million over the previous year due to a strong growth in assets under management and increased activity with customers. The largest contributor to fee income with EUR 204 million is asset management, up 30% year-on-year.
An increased commercial activity brings assets under management to record levels at the end of the year as well as the fees. Second contributor to fees is Payments and Collection from corporates and individuals growing 17%. Performance has been clearly recovering in the year, in particular in the second half with a pickup in economic activity. Third, we see the fees from trade and custody growing 16%. Then we have FX business with customers went up 6% due to the strong trading and third party mutual fund subscriptions.
Risk-related transactions and life insurance and pension fund sales brings their fees up 12%-13%, improves their previous rate of growth. In the other operating income and expenses, main components are EUR 95 million of trading income plus dividends. That compares very well from last year to a good trade activity, plus EUR 13.5 million more of Línea Directa dividends.
The 6% increase in regulatory charges or EUR 7.1 million, together with a small miscellaneous impact weighed on the other income expenses, negative difference in the year. Gross operating income for the year stood at EUR 1,855 million, an increase of 8.6% from 2020 and more relevant to us, 13% up from 2019. In Portugal, gross operating income at EUR 152 million grew by 10%.
In Ireland, EUR 59 million grew by 3% in a difficult year for consumer finance, but offset by strong mortgage production. In Luxembourg, gross operating income at EUR 17 million grew by 30%. EVO Banco gross operating income at EUR 24 million grew 14% due to a strong increase in mortgage origination. Moving into costs. Group operating costs in the year total EUR 853 million. They are up 2.9% from previous year, and due to the extraordinary of the last quarter, up 7% from third quarter.
Operating costs from EVO were reduced by EUR 10 million or 16%. In Portugal, costs are EUR 3 million or up 4% over last year, while incomes grew by 10%, meaning a continued efficiency improvement to 56.8 cost to income ratio from over 60s in the last year. In Avant Money, costs were up EUR 1.7 million or 5% due to the launching of the new mortgage business. Group personal expenses are up close to 6% over last year due to the one-off increase of staff variable pay following the strong commercial activity.
General and administrative expenses remain under control. Efficiency continues to improve in the group. Cost to income dropped 250 basis points from 2020 to 46% and 290 basis points from two years ago. We plan to manage the long-term cost to income in the 43s level, thanks to the improved efficiency of in our new businesses and geographies. In Portugal, our efficiency stands below 57%. Ireland stands at 58.6%, and EVO improving its negative efficiency. Our very efficient Spanish business standalone runs an efficiency ratio of 42%.
With all this, pre-provision profit showed EUR 1,002 million, a stunning 14% increase for 2020, and more relevant, 19% ahead of 2019. Let me highlight now the growth rate of our pre-provision profit has multiplied by three, showing the strength of our customer business from 4.5 in 2020 to 14 in 2021. Moving to the cost of risk. Cost of risk finished the year at EUR 283 million or 39 basis points of total credit exposure. 7 basis points up from what 2020, and probably showing a peak from the upward trend started in 2019.
However, the cost of risk, if we include the 2020 extraordinary credit provision, stays well below that of last year. The increase in cost of risk in 2021 has to do almost with the Stage 2 increases in the corporate business and diversifies in the rest of countries and businesses. Looking ahead, we are somehow optimistic after all the moratorium book has matured and less than 40% of the ICO liquidity lines for corporates and SMEs has been extended, with almost no impact in credit quality, nor in early indicators as delinquency in less than 90 days.
In Portugal, after the maturity of moratoriums in October, no deterioration of NPL ratio has yet occurred, and includes SME lendings as well as mortgages, thanks to the quality of our customers. As we see things today, after a contained year in 2021, we expect cost of risk to be similar, around 40 basis points for the full 2022. On the other provisions for future litigation expenses, the downward trend expressed in our guidance in the range of 20% reduction every year, was outperformed with a reduction of more than 20%.
This is excluding the extraordinary front-loading that occurred in the third quarter. This front-loading, together with the downward trend is in provisioning, will produce an additional positive effect in the reduction of the run rate for 2022. Moving on. After the provisions and the LDA spin-off results, group net income stands at EUR 1,333 million, a new record figure. Without the extraordinary profit, it would be EUR 437 million, and still below the 2019 that I did mention before. It includes EUR 57 million of goodwill from the acquisition of EVO.
Still, the compound average rate of growth over the last nine years shows a strong performance and promising recovery after 2020, the year of the COVID. Group's return on equity stands at 9.6%, still with only a four-month contribution of Línea Directa in the year, and excluding the extraordinary from the spin-off. If we include them, it should be at 29%. We expect for 2022 to obtain a return on equity over 10%, with only dividends as contribution from Línea Directa, and clearly in line with our target.
As every year in the last quarter, here you can see the annual total return to the shareholders of Bankinter. In this special year, adjusted for the spin-off of Línea Directa. As you can see in the chart, the Bankinter share price adjusted return has been 38%. Should you add the dividends paid by both now separate companies, EUR 0.23 for Bankinter and EUR 0.07 for Línea Directa, total dividend yield at 5.3%. Adding both total return for our Bankinter Shareholders in 2021, over 43%.
Bear in mind, the total dividend increase of 31% over, comparing to 2019. I will now go into the credit risk liquidity and solvency management section. Non-performing loans continued their stable trend with total NPLs at EUR 1.69 billion, just up only EUR 8 million from 2020, and down from September due to the sale of EUR 90 million portfolio of NPLs in consumer finance as every year. The group's NPL ratio has bottomed at 2.24%.
It decreases 16 basis points from last September due to the mentioned sale of consumer finance and the increase of the loan book. In Spain, NPL ratio stands at 2.36, 6 basis points below last year and 70 basis points from September. This ratio continued to be way down from the sector average. In Portugal, NPL ratio declined to 1.72, 42 basis points down from a year ago. As shown in the chart on the right, NPL ratio in Spain went down to 2% for households and up one basis point to 2.8% for corporates.
Total provision of non-performing loans after the extra provisioning built in 2020 stands at EUR 1.1 billion, up EUR 56 million from last year. All this has relevant impact on provisions coverage, which is at 64% from 61% of last year. Next slide. The group's foreclosed assets portfolio is 25% smaller than a year ago. It decreased by EUR 56 million from previous year. This small portfolio now accounts for only EUR 171 million. The coverage also improved to 53%, an 8% increase, and clearly above the average discounts of our assets.
Moving into capital, our fully loaded CET1 ratio finished the year slightly down at 12.05, a decrease of 20 basis points from last quarter and 24 basis points below December 2020. In the year, our retained earnings contributed with 67 basis points, taking into consideration the Línea Directa spin-off. Capital consumption of Risk-Weighted Assets growth from the business has been 62 basis points.
Valuation adjustment also brings 12 basis points negative due to market volatility. The IRB deficit and the implementation of new regulatory parameters took 50 basis points, and finally, the insurance participations decreased by 2 basis points. With all this, total capital ratio went up 15%, a very comfortable level over the minimum regulatory requirement, and the leverage ratio stands at 4.9. Finally, the year-end 21.69 ratio of Risk-Weighted Assets for MREL remained well ahead of the regulatory requirement for 2022.
Liquidity. Our funding gap continues to nose down since 2016, from EUR 5.7 billion five years ago to a negative EUR 5.3 billion. This negative gap in Spain more than offset the ones coming from Portugal and Ireland, where lending is larger than deposit for the time being. As a result, loan-to-deposit ratio achieved record levels of 92.2%. Let's review now the performance of the different business lines.
Here we can compare the diversification of our income in the last five years, well balanced between the main contributors, corporate and commercial banking. Together they represent 59%. 13% is now coming from our customer finance subsidiary, is slightly impacted by the business contraction in the year. In 2021, our investment banking unit strong incomes represent 10% of total. Then Portugal income represent 8%. Ireland, 3%. EVO and Luxembourg, 1% each.
Last year, 4% of total income comes from non-customers with the ALCO and TLTRO contribution inside. Moving to the Corporate Banking business, the loan book increased by EUR 0.3 billion or less than 1% in a very difficult year for corporate loan demand. It remained flat in Spain while the sector was contracting their loan book by almost 2%. This would make our corporate market share in Spain to grow again this year from 5.2% in November 2020 to 5.4% this year.
In Spain, thanks to the last quarter increase, like every year, it reached EUR 26.7 billion or EUR 19 million more than in December. A quick review of the relevant sources of income. International Trade and Supply Chain Finance enjoy another good year and continue to grow its activity in working capital financing, International Trade, et cetera.
Transactional business with corporates recovered levels of 2019 after a very stagnant 2020, for example, risk, financial risk guarantees and similar grew by 13% and the contribution to incomes went up 4% to EUR 128 million for the year. Regarding the ICO liquidity financing for corporates and SME granted in 2020, the outstanding at year-end 2021 was EUR 6.5 billion from a total EUR 8.7 billion granted, mainly to mid and small corporates.
From this total, 40% of them have asked for extension, either the maturity or the grace period of the loan, also extending the guarantee and improving rate conditions. Out of this amount, the NPL ratio stands at 1% today. After a very good year in 2021, investment banking now has its own section in the presentation. Here is the increased contribution to revenues coming from the Corporate and Private Banking products and services. This business is creating a recurrent and stable fee income flow with a strong valuation on its own.
Their operating income reached EUR 187 million, growing 61%, including the extraordinary fees from Helia . Even without this, extraordinary growth would have been 22% in ordinary fees and net income. As you can see in the key indicator of Bankinter Investment, they manage 16 different vehicles of alternative investment for over 3,000 of our Private Banking customer, with a total capital committed of EUR 3.2 billion. More relevant, they have distributed to investors of already over EUR 680 million in returns.
Activity that continues to be strong in our structured financing, managing over EUR 4 billion loan book growing at 5%. Prudence and transparency are especially relevant in the marketing of these type of products, since not only a scrupulous level of regulatory compliance being assured, but also an adequate customer's profiling is needed, identifying those who are potentially suitable for this type of investment and placing limits to them.
Here you can see a snapshot of the different vehicles for alternative investment in the following slide. Yeah. Okay, moving on. In Wealth Management, customer assets under management had continued to grow thanks to the strong commercial activity and an increased number of customers.
In both businesses, Private and Personal Banking, assets under management increased by 16% to EUR 79.7 billion in assets under management, split between almost EUR 50 billion in Private Banking and almost EUR 30 billion in Personal Banking. The track record of the last five years is 60% growth in AUMs. The strong commercial activity can be measured by net new money in the period that shows a record EUR 6.4 billion increase. It's split 3.6 in Private Banking and 2.8 in Personal Banking.
Activity in our Retail Banking continued very strong. In fact, customer acquisition in Spain set a new record and grew by 17% from the previous year. In products, salary account balances in Spain grew by EUR 2.2 billion in one year, totaling EUR 14.9 billion, close to 3x the balance five years ago. Mortgage strong origination in the year of EUR 5.9 billion represents an increase of 58% from 2020, where Evo contribution doubled its year production to EUR 0.7 billion and Avant Money reached EUR 0.4 billion.
72% were fixed rate and the average loan-to-value ratio is at 54%. Market share in new mortgages during the last 12 months, ending in October, has reached 9%, which is a remarkable record. Our total mortgage book keeps growing in the three different markets. It's reached EUR 31.3 billion. In Spain, the increase was 8.6%, while the rest of the market only grew by 1.3%. Our ever more relevant asset management business improved strongly in the year and clearly increased its growth trend in all categories.
Mutual funds went up 30% year-on-year, pension funds 16%, and Patrimonial Services and SICAVs management 20% up. In total, EUR 8.4 billion in new balance sheet managed funds at 27% growth. In mutual funds, all managed and third-party growth in the period has been very strong, and together with the positive market effect, brings EUR 6.9 billion new money to reach a total of almost EUR 30 billion, 30% up, a new record. Now let's move into Portugal, where they have closed again a very good year.
Loan book grew by close to 6% to almost EUR 7 billion, and retail funds almost reached EUR 6 billion. Growth in loan book was balanced between Corporate Banking, EUR 2 billion up 6%, and retail banking, almost EUR 5 billion to increase 5%. Like in Spain, off-balance-sheet strong performance reaches EUR 4.4 billion with a stunning 22% increase from last year. As for the income statement, operating income grew by 10% with very small contribution from extraordinary recoveries.
Cost shows a contained growth of 4% in line with cost control plans for improving efficiency, now below 57%. All of the above brings PPP up by a very strong 20% in 2020. Finally, after EUR 15 million of our normalized loan loss provisions, profit before taxes reached EUR 50 million, a strong 11% from last year. We share a very positive evolution of the efficiency ratio or cost to income over the last five years, from high 70s to mid-50s, and is expected to continue to trend down to the mid-40s in the coming years.
Moving into consumer finance, in Spain, Portugal, and Ireland, including their mortgage production, they reach a total book of EUR 3.719 billion up from September, and 25% up from a year ago, helped by the mortgage origination in Ireland and despite contraction in credit card outstanding in Spain. The breakdown of the loan book by geography is now EUR 972 million coming from Ireland Avant Money, growing 97% from last year, and EUR 311 million from Portugal, growing 24%.
The rest is Spain, where the loan book grew by 5%, mainly in personal loans to Bankinter customers, despite a reduction of EUR 84 million in revolving credit card outstanding. The breakdown of the loan book by product is on the right hand. Personal loans represent 54%, growing by 50%. Transactor credit cards, mainly in Spain and Bankinter clients, represent 23% of the total, or EUR 800 million with a 13% growth.
What we can call open-market revolving credit card is now only 14% of total loan book and less than EUR 500 million in outstanding after a decrease of 15% in the year. Also, the new home mortgage in Ireland reached over EUR 400 million and represent now 11% of loan total book, coming from only EUR 20 million just a year ago. Total new credit origination through the month, mainly personal loans in Spain and Irish mortgages, represent EUR 1.5 billion, and the total number of customers grew by 6% to 1.8 million.
NPL ratio has been reduced to 5% from 6% a year ago, or EUR 171 million in total NPLs, and cost of risk at 3.5%, lower than the 5% in 2020. We continue to see good opportunities in this profitable business where we feel comfortable with the degree of control of asset quality indicators and with a very high efficiency of the business, cost to income ratios below 30%.
After just one year in Ireland underwriting mortgages under the name of Avant Money, this activity has been able to increase the loan book by EUR 430 million in the year to almost reach EUR 1 billion in total loan book or 97% growth. All this growth while maintaining very good asset quality ratio with NPLs at 0.6% and cost of risk of 1.2% with a coverage of provision of 284%.
We aim to keep growing in 2022 to grow our current 3% market share of drawdowns in mortgages, as well as after a very good last quarter of the year in new personal loans and credit cards outstanding. Let's move to EVO. EVO has been in a steady development of this business plan. We expected a slowdown in credit cards and personal loans during the year, but with all their focus in a strong increase in the mortgage underwriting. New mortgages granted in the year were the record of EUR 729 million.
This is almost over two times the origination of previous year, making the loan book to EUR 1.8 billion. As for liabilities, EVO has EUR 3.7 billion in retail deposits, up 8% from last year, and EUR 291 million in off-balance sheet funds, up 11%, including investment funds, pension funds, equity, and unit links. Client acquisition has been over 36,000 new customers. As for asset quality, NPLs is now below 1% or only EUR 17 million with a coverage of 63%.
This steady reduction of the negative results of EVO is in line with their plans to return to profitability based on increased customer acquisition, robust mortgage lending, and good prospect for consumer finance, all with a strong cost control. To finish, here you can see some achievements on our ESG Strategic Plan 2023.
A résumé of the measures taken in relation to the bank's ESG performance is the signature of the initiative Net-Zero Banking Alliance, led by the UN, and under which the bank has made the commitment to be net zero by 2050. We are already carbon neutral in relation to Scopes 1 and 2, as our electricity is 100% green. Some steps have been taken towards business product lines. We already manage and distribute funds under ESG criteria, up to EUR 8 billion.
The bank has also signed several agreements to finance projects related to development of green hydrogen for EUR 800 million, and we keep investing in renewable energy finance projects. Now we have a recap. Strong commercial activity reflected in record volume growth in all geographies. We remain best in class in asset quality and managing our coverage for potential risk. A strong customer business performance allow us to increase growth rate in our pre-provisioning profit to reach a new record of over EUR 1 billion.
A very successful spin-off. Even excluding those results, the group net profits stand at EUR 437 million, growing 38%, and a strong set of management ratio with return on equity at 9.6%, efficiency at 46%, which continue to be Best in Class. Let me share with you what we expect for 2022. We expect growth in all geographies. In Portugal, in all three commercial, corporate and consumer finance loan books, we expect growth.
In Ireland, with increased production in mortgages and personal loans and promising growth in credit cards, we also expect growth. In EVO Banco, in mortgage productions, personal loans, and recovery of consumer finance business, we do expect growth. For Spain, we continue to expect loan growth in mortgage lending and in other non-mortgage retail lending, with corporate loan book to recover from flattish 2021 after the impact of the ICO lines.
For 2022, our guidance in net interest income, we believe we should be expecting a low single-digit growth in a continued rate difficult environment. The increase in activity in stable markets will keep fee income growing at double digits, excluding the third quarter one-off. That is mid-single digit in a like for like situation. Thus operating income in the mid-single digit range. The group cost will grow in a low single digit, meaning keeping growing below income. That means improving efficiency one year again.
Finally, cost of risk after an improved 2021 year and with a comfortable loan book going forward, we do expect to maintain 40 basis points level. I think that's a good moment to finish this presentation and take your questions. Thank you very much.
Thank you, Jacobo Díaz, for that thorough explanation. We have received quite a few questions now, and we will try to address all of them. Let's start with the more specific questions in the quarter performance. For example, we had a few questions about the fee performance in the quarter, whether there are any extraordinary fees in this quarter and how much of the accounted fees are related to success fees, and how that compares with 2020.
Okay, thank you, David. There is no extraordinary fees in this quarter. There are no extraordinary fees. Regarding the success fees, which is something that happens every year, this year we have recorded an increase in those success fees comparing to the past year in around EUR 6 million, sorry, increase. That is the only extraordinary comment that might be mentioned because the rest of the fees, as we have shared, are a result of the ordinary commercial activity with clients.
Thank you. In the same line, we have some questions regarding the cost increase in Q4, and also you can explain in more detail the moving parts of that.
Okay, you mean the expenses? Okay. In this quarter, we, as I did mention, we have increased our expenses, comparing to previous quarters and to last year expenses in personnel expenses. This is a result of the outstanding commercial performance that we had in this second half of the year. Basically, the increase in expenses is focused on personnel expenses related to the General Administrative Expenses. This figure is 5% lower than a year ago, as you know, there is some seasonality.
The third quarter of the year in Spain is summer, there is very little activity with clients. The seasonality of the third quarter in terms of expenses normally is very low. Normally, the fourth quarter has much more seasonality, which is normally a little bit very high. Even with that, we have reduced in the fourth quarter 5% our costs comparing to last year same quarter. In addition, for the entire year, we have been able to finish flattish in General and Administrative Expenses.
Having said that, and as a result of the good performance of the good commercial activity, we have been performing marketing activities in this fourth quarter. That might be the reason why you feel that increases in General Expenses have been high in this fourth quarter. Again, this is related to this variable remuneration of the company and General Administrative Expenses. We think that it has been a very good year as a whole.
Thank you. Two more questions on the specifics of the quarter performance, the fall in the CET1 ratio.
Yes. Very easy. We have grown EUR 2 billion in the loan book, and this is the main reason of the reduction of this CET1 ratio. Once again, the third quarter tends to be a very low quarter in terms of seasonality. Just bear in mind that our book was reduced by EUR 1 billion in the third quarter, and this quarter we have been increasing by EUR 2 billion. This is the reason why there is that reduction.
Thank you. If you can explain what happened to the tax rate in the quarter?
Yes, I think the tax rate has improved a little bit during this quarter, and this is a result of our tax initiative and our tax analyst. Basically, because some of the tax incentives that we should or that we could apply in 2020, we've not been able to apply them due to the low level of returns or profits in 2020. Those tax incentives, what we call the capitalization reserve, was not able to be applied at the full level in 2020 and has been applied at the end of this year.
Thank you, Jacobo. Now moving on to the looking forward on 2022 guidance and expectations. Probably we will start with the loan growth. What is your outlook for 2022? And also, what will be the main moving parts?
Okay. As I did mention, we expect growth in all geographies and in all the businesses. As a whole, I will say that we expect a mid-single digit growth in the loan book. This is a similar focus as the one that we've seen this year. That means that we do expect good levels of mortgage production similar to the ones that we've seen this year. In parallel, we do expect recovery from the consumer finance business.
Of course, an improvement in the Corporate Banking loan book due to the recovery of the activity of the economy, and also of the European funds that we do expect more impact in 2022 than the one that we had in 2021, which has almost been negligible.
Thank you. We will now go through the guidance for 2022, and we will reconfirm most of the PNL lines, obviously. Starting with the NII, what are the drivers for 2022, and what do we expect from obviously the contribution from the different moving parts, mainly TLTRO III and ALCO contribution?
Okay. In terms of net interest income for the following year, as I did mention, we expect, first of all, a loan growth which is basically the main driver. I want to remind you that the way we record the TLTRO III is that we accrue the TLTRO III. That means that we do expect a stable income from the TLTRO III facility across the entire year. So there's no volatility in that point. We do expect a slight recovery in the Euribor reference. That means that the overall in 2022, we do not expect any negative repricing effect.
That means we expect some stable effect in the repricing of Euribor compared to almost EUR 25 million of negative impact that we had in 2021. From that side, we do expect that the client margin remains stable or even slight recovery across the year. We know that the first quarter will still be with some negative effect from the repricing, but the following quarters, we should see the recovery.
We do expect that a better mix in terms of fixed rate mortgages, once again with Corporate Banking more production and consumer lending, more presence. That's, we think, that this will drive our client margin to be stable or slightly positive in the coming months.
Thank you. Specifically on the ALCO contribution, do you expect any increase in the portfolio?
Not for the time being. The ALCO contribution in 2021 has been slightly below 10% of the total net interest income, and we expect stable income from ALCO in 2022. Therefore, we do expect similar figures, slightly below 10% of net interest income contribution.
Thank you. Very clear. Fee income, what do you expect for 2022?
As we have said, we expect, including the extraordinary income from Helia, a mid-single digit growth. The main drivers will be, again, assets under management, which as you have seen, has performed very, very well in 2021. We have seen the increase in assets under management of EUR 8.4 billion, but also remind that we have increased our deposits by EUR 7 billion. That means that overall, we have EUR 15 billion more resources, and we have a lot of potential of bringing new assets under management in the future.
The recovery of the activity is also driving the increase in Payments and Collections. Fees related to credit cards are increasing during the past two quarters, and there we do expect that trend to continue over the following months. In addition to that, we have shared with you the banking, the investment banking activity and how they've been growing their contribution across the past years. We do expect to continue to increase the volume of activity of this business line, therefore, we do expect more income in the coming quarters.
Of course, insurance, which another business that we like since we don't perform anymore any business in the insurance since Línea Directa left the group. We do expect insurance to start becoming a new great business in 2022 and potentially much more in 2023 and onwards.
Thank you, Jacobo. In terms of expenses, again, you can repeat the guidance for 2022.
Yes. In expenses, we do expect a low single-digit growth. We do expect growth of cost below the growth of income. Do you know that this is very serious for us, and we try to perform that mantra every year. Expenses, we do expect increase in personal expenses, and this is basically because we think that will be a salary review. I want to remind you that in 2021, there has been no salary review in the group, and we do expect in 2022 to perform a salary review. There might be a slight increase in some specific commercial staff.
But apart from that, we should see some sort of a stable staff in the company. In general, administrative expenses, whatever is linked to inflation, we will try to compensate. Inflation, of course, is something we need to take into consideration. Whatever impact, it will be compensated or will be managed in order to avoid that whatever increase in costs related to inflation will remain under control below this guidance of the mid-single digit.
Thank you. We have one specific question in Portugal. Where did you see the cost to income for that unit?
Yes. As I just mentioned, cost to income in Portugal will drive or converge to the 40s. If today we finish the year around 56%, and we've been reducing somewhere between four or five points every year, this is the trend that we need to follow. I would expect that Portugal will be in the 40s in two years' time.
Thank you. Moving now down to cost of risk. What are your guidance, your expectations for 2022?
Yes. Cost of risk, as you know, it's been a very difficult item to forecast. We start 2021 with a range around 40-50. Then we said 40, more or less 45, and then the low range of 40s. It's been always improving our guidance. For 2021, sorry, for 2022, we want to maintain this 40 basis points cost of risk. The reason is there is still some uncertainty about the maturity of the ICO lines that will start in April.
We feel comfortable with the way, I mean, the quality of our clients, but I think it's quite prudent to start the year with this guidance, which is exactly the same figure that we had in 2021. That is basically the reason we do expect very low, let's say, delinquency in the retail or commercial banking business, and we have more uncertainty on the corporate loan book.
However, I mean, the increase in our deposits from the Corporate Banking activity is very high. That means that we have a very safe position on that, in addition to the high level of guarantees of our loan book in the Corporate Banking world.
Thank you. Just one clarification, this 40 basis points guidance, is that for the cost of risk, credit risk alone?
Yes. Credit risk alone, 40 basis points. I guess that your question might be if litigation costs are included in there. The answer is no. We have presented 19 basis points of litigation costs during 2021, of recurrent litigation costs. As I did mention, we do expect a decline in the litigation costs in 2022. We've been sharing with you that we do expect reduction every year around 10%-20%. This is something which had happened in 2021.
It has happened in 2020. In 2023, in 2022, we do expect an additional reduction of 20% plus in the recurrent level of our litigation. That means excluding the anticipation of provisions that we had last year. We do expect at least a 20% reduction in litigation risk.
Thank you. Two more questions on cost of risk to finish that one off. What do you see our normalized cost of risk rate?
Yes. I think we've shared with you the normalized cost of risk would be somewhere between 30 and 35 basis points for the entire group.
Thank you. Also, we have questions regarding whether we have any plans to release some of the provisions that we have for ICO loans after the grace periods ends. Also, what percentage of ICO loans are repaying principal already?
Sorry, I missed the last question about the ICO loans.
Yes. How many of the ICO loans are already repaying principal?
We have received a request to extend 40% of the ICO loans. That's the figure. There are 60% of the ICO loans that have not required an extension of terms or increase of the grace period. Sorry, what's the-
Whether we're planning to release any of the
Oh, sorry. About the provisions. Yes, sorry about that. No, we're not planning to release anything for the time being. I hope that you understand that even if current circumstances seems to be more benign, we need to wait until the second quarter, as I share with you the past quarters. I think until we don't have clear information about the impact of the end of the maturities, which something that will start in the month of April and May, we should be prudent.
We have seen in the past, a good example is Portugal, that moratorium have finished in corporate and in commercial banking. Basically, for the time being, we have no impact on our cost of risk, which is our, I mean, excellent news. We prefer to be prudent. I don't know if other things differently, but the way we think in the bank is we want to be prudent. There is time enough in the future to release anything if it's not required. For the time being, we want to be prudent.
Okay. Moving on to capital. Analysts are asking us about what is the guidance for 2022 and also the guidance for dividend payouts.
Okay. The dividend payout will stay at 50%. I mean, there is no changes in our dividend policy. Regarding the capital ratio, we do not expect any more regulatory impact in the future. I mean, the next milestone would be Basel IV, potentially in 2025. I mean, that's far away. Related to more short-term impacts, I would say that apart from the growth of our loan book, this is gonna be the driver of our capital ratio.
We do expect, of course, the review of our operational risk models, and we are always, you know, updating our capital models of the credit risk portfolio. Apart from the growth of the book, that should be the impact. Overall, what do we expect? We may see a slight reduction in our capital ratio. Just bear in mind that our guidance is 11.5%. And before the pandemic, we were at levels of 11.7%, 11.8%. I would say that we should be somewhere 11.8% or 12% in the coming quarters.
We will see. Of course, there is plenty of seasonality during the year, as you have seen in 2020 and 2021. We are, let's say, quite comfortable with the level of buffers of capital that we do have. And of course, just to remind you that we have the minimum regulatory level in the industry.
Okay. We had a few left questions regarding our business units and also business trends. Let's address, for example, consumer finance. How do you see the trends there? And also, more specifically, you can confirm how much was the sale that we did of NPL sale in Q4.
Yes. The NPL sale in Q4 was around EUR 90 million. This is a figure that every year goes somewhere between EUR 75 million and EUR 100 million. This is a recurrent sale that we will perform every year. This is from positions in Spain. As you know, in Ireland, we sell everything in a much recurrent way. In consumer finance business, we need to understand that there are three countries. We have Portugal, we have Spain, and we have Ireland.
Ireland is recovering very well in the past quarters due to the opening of the country and starting a much higher level of mobility. The level of growth in loans and credit cards is recovering, which is a very positive news for the book, but also for the net interest income. Obviously the mortgage business is behaving very well. We do expect probably a slight increase in the new production compared to what we've seen this year. This year, we've seen EUR 400 million new production in mortgages.
The following year we should see something a little bit higher. That would be the performance I will expect for Ireland. I must say that they are achieving outstanding results, and there is nothing that makes us think that things would change. We are very optimistic. In terms of consumer finance in Portugal, they're behaving very well. They started with a small book a couple years ago, now they're growing steadily. There's more focus on credit cards and focus on personal loans.
Spain, we do expect again a growth. Similar trends like we've seen in the past quarters, with much more focus on loans than in credit cards, and much focus on Bankinter clients versus non-Bankinter clients. The non-Bankinter clients will start to grow a little bit across the year, but we expect positive figures for the consumer finance business during this year.
I mean, definitely this year will be a much positive feeling in the consumer finance as there is a good correlation with the economic recovery. We should expect the book to grow somewhere between 10%-20% over 2022.
Thank you, Jacobo. Regarding Retail and Private banking, we had questions whether we are planning to accelerate the shift from deposits into a balance sheet.
Well, I guess that is a target. I mean, that's what we've been doing. I guess that the result was not bad. We brought assets under management with EUR 8.4 billion of increase. As I mentioned, we brought also on board EUR 7.5 billion of new deposits. We have the opportunity to bring much more volumes into the assets under management world and to bring them into more added value product.
I remind you that it's not only assets under management in terms of mutual fund and investment fund, but also we do have equities, we do have insurance products, and as a whole, this is something that we need to consider, huh? Just, I want to remind you that we have under custody around EUR 60 billion. Six zero.
Thank you. Also, if we are planning to be more aggressive in charging for deposits.
As you know, we do not charge for deposits for individuals. This is something that we have shared with you, and this is something that we do maintain. Indeed, we do charge for large corporations and institutions, and of course, we will be continue that policy in the future.
Okay. Regarding EVO Banco, they're asking us is, do you have any comments regarding the contribution to the P&L of this unit, and also, when do you expect it to turn to profit making?
Pre-provision profit of EVO Banco has had an outstanding results in 2021. Incomes have grown and costs have declined. This is exactly what we do expect from EVO. They are building a great loan book. You've seen the new production of mortgages of EUR 700 million. The target for 2022 is gonna be similar or slightly higher, again, so the book will continue to grow. There will be more focus on personal loans and credit cards and all these consumer finance business and of course on the assets under management business.
From the income perspective, 2022 should be another good year. In terms of cost, very tight cost control. That means that PPT will be again very, I mean, in a good trend of growth. We do expect in 2023 to start having specific months in the year already in breakeven.
Thank you. Regarding the alternative investment vehicles, are we expecting any success fees for 2022?
No, this is something that it is not planned, because as you can imagine, this is very unlikely. Things happen that it takes many months and quarters to plan those type of execution of operation or transactions. It is not in our plan to execute any transaction in 2022.
Thank you. My last question, do you expect any changes to the contribution to the Single Resolution Fund, to the Spanish Deposit Guarantee Fund?
No, unfortunately. For the Single Resolution Fund, we do not expect any changes. That means that it continues to grow the level of charges that we receive from the Single Resolution Fund. From the guarantee fund, we do expect a more stable contribution, although the increase in our resources will make that the invoice in 2022 might be again higher.
Thank you, Jacobo. Thank you all for joining us today. We remain at your disposal in the investor relations team for any further information you might request from us. Goodbye.
Thank you very much. Goodbye, and keep safe.