Hello, and welcome to the CTT full year 2023 results call. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. Today, we have João Bento, CEO, and Guy Pacheco, CFO, as our presenters. I will now hand you over to your host, João Bento, the CEO, to begin today's conference. Thank you.
Thank you, Laura. Good morning, everyone. Welcome to our 2023 year-end results presentation. 2023 was another great year for CTT, another growth year, with significant contributions from Express Parcels and the bank as the main contributors for our growth. And if you join me on page four of the presentation, I'll start exactly with parcels. We've delivered, for the first time, more than 100 million packages during the year in Portugal and Spain, and we've set absolute records of volumes during the peak season in both geographies. Especially relevant is the fact that we gained significant market share in Spain, which is our main growth geography, with record volumes and significant margin expansion.
Moving to Mail, it's we have a significant price increase for the first time. Not as much as for this year, but significant. And that, combined with the mix, enabled what we would call stable mail revenues. And we've been able to somehow mitigate the pressure on inflation on cost by inflation through new measures on the corporate center, productivity to enhance margin protection. And we see Mail growing better and better from now on. Moving to financial services and retail, we of course had a very high, abnormally high, I should say, level of public debt placements that ended roughly at mid-year.
Because the volumes were then forced down by the treasury. With those, especially the strict ceilings that were imposed, and also on the interest rates on debt placements are restricting demand. We hope that the election will resolve at least the cap very soon. Our commercial focus now has shifted to the distribution of insurance and other services to cope with the lower placement of public debt. Finally, the bank with a very strong growth in all aspects, in deposits, in line with the announced strategy. Steady growth also on loans, and the bank is moving well at very solid steps towards the 2025 targets that have been announced.
On the right-hand side of the page, we have a few notes on financials. So revenues went up 11% in the quarter, year-on-year, with the transformation units, Express and Parcels and the bank, leading this trend. And while the bank grew 10% of revenues, Express and Parcels continued to accelerate to an impressive 56% growth on revenues in the quarter. Recurring EBIT also performing well, with well -24% vis-à-vis last year, because we have in the last quarter of 52 this abnormal high placement of debt.
But, all in all, the year ended with EUR 88 million, or a 36% increase year-on-year, which is above the announced objectives and the guidance that was given to the market. Express and Parcels and the bank are indeed the EBIT growth levers, and they underline the benefits of the diversification portfolio that CTT has built for this transformation process that we are managing. And, finally, a strong operating cash flow generation of over EUR 114 million in the year, or 15% higher than the previous year.
Free cash flow of EUR 94 million, or 40% higher than last year, and a very strong consolidated net cash position of EUR 39 million, which represents a 69 million improvement versus the last year. And if we account the bank in equity method, net debt stood at EUR 177 million, or well, not a sluggish down, the flattish down EUR 8 million versus last year. On slide number five, I'll go very briefly on this. We can see very well that how Express and Parcels became the biggest contributor for revenues and also for recurring EBIT in the quarter. On the top right-hand side of the slide, we see this chart with the bridge, EBIT bridge-...
From last final year 2022 to final year 2023, where we can notice a small negative contribution from mail. So, a lower EBIT this year than the previous one, but then very significant positive contributions from the bank and from Express and Parcels, and also financial services and retail, with the very first, good first half of the year. Moving to slide number 6, a little bit more detail on the impressive growth on parcels. Slide number 6 refers to Portugal, where this impressive growth has been steady quarter-on-quarter, with very significant growth on volumes. And also, if you look at the right-hand side, on revenues.
This also led us to increase our already significant market leadership. Moving to slide number seven, we can see a growth well beyond the market. In fact, CTT in Spain, or CTT Express, was the winner of not that relevant market share, sorry, market growth during the year, but CTT grew clearly or by far above the market, with an impressive 187% higher, so clearly more than doubling on the last quarter. We have a number of interesting aspects that we'd like to highlight.
The fact we have onboarded relevant new customers, new large international resellers, and we are focusing on diversifying towards smaller clients, which during 2023 also grew significantly. One of the reasons why the performance was so well received by the market is that we have shown high quality and efficiency. We have maintained the quality of service with high delivery efficiency rates in spite of an increase in volumes per working day. And finally, we are adding new services that are enhancing the portfolio, and I would call the attention to the one that has been. Well, we started actually by the end of 2022, which is the customs clearing facility in Spain. This is a unique of its kind.
There's no similar facility because we combine in a single step not only customs clearance, but also sorting, which provides for an impressive efficiency, not only on cost, but also on quality that we provide to our clients. And combined with the handling of returns and the largest convenient points, the largest PUDO network with over 13,000 PUDOs in Spain, which is the largest available network. We are providing these new services. This is very important because it provides additional stickiness. The more services one provides to the customers, the higher fidelity it generates. A very significant growth, a very important one in Spain, that was fueled by all client segments.
The final word on the Spanish and Iberian market on parcels. Moving to slide number eight. We've seen the market growing steadily in Portugal since 2019. This is in fact because e-commerce adoption is growing at a significant pace and I would say constant pace in a monotonic way. Not so much the case in Spain, that grew also very, very significantly, but with a small hiccup in 2022. So we can see here that the Spanish market grew some around 4%, and this is also a good indication of how much market share we gained. On the right-hand side, we can see that Portugal is now converging faster than Spain.
But both countries, because Portugal is around, it's around one, the adoption of e-commerce in Portugal is around one third of the average, if we, if we consider all countries, and Spain is below half of the adoption. And so there is still a lot of room for natural convergence. The meaning that we're going to have, and to see, and to feel tailwinds in terms of e-commerce adoption, which will probably enable us to keep growing at very relevant rates. And with this, I would pass the floor to my colleague, João Sousa, to guide us through the results and the impacting results of Express and Parcels, and then also on mail and financial services and retail. João, up to you.
Thank you very much, João. As you can see on slide nine, in Express and Parcels in Portugal, Portugal posted growth in express and parcel revenues of 13.2%, with revenues of EUR 42.9 million. This is a result of the strategy we have been implementing to attract new customers, but also more traffic in the current customers, so we need market sharing the customers we have in our customer base. But also, we are always looking for customer retention, through a good diversification of our portfolio in customers, meaning in the mission of the customers and also in the sector of sensitivity. So that way, we can manage in a good way, the retention of the customers.
EBIT in Portugal grew more than 35%, a result of EUR 3.9 million in the first quarter, translating in a margin of 9.2%. This good performance in margin results in a continuous improvement in operational optimization. So, we are always looking the way that we can increase our market share and revenues, but in the same way, also bringing quality to our customers, and also how we can optimize our operation in Portugal and both in Spain. On slide ten, we can see that in Spain, in the first quarter, we have revenues of EUR 67 million. This mean a growth of 170%. Also, this is a result of a growth in customers in all segments.
As you know, we are always looking in Spain to grow in all segments in customers, so in that way, not being dependent on just in strategic customers. And we can say that in 2023, we grow in all segments from the SMEs and for to big clients and also in strategic. Also, like João Bento was saying, the first days of operation of customer service offers, so this is very good to stick with the customer in test, so bringing more services to our customers. And this also builds their loyalty with CTT Express in Spain. These revenues results in a growth in EBIT of 380% in margin.
That means, EUR 3.8 million in the first quarter and means a margin of 5.5%. On slide 10, sorry, on slide 11, where we look for the mail business. In 2023, the press mail reached revenues of EUR 356 million. This, this means a practically flat value compared with the previous year. Most of these, revenues or these flat revenues comes from the, the increasing price pricing, pricing that help us to compensate the traffic drops.
Because despite the continuous work that we are doing in a commercial way, try to retain the customer, the customer traffic in mail, as you know, digitalization is always a good challenger for us, and the increasing in pricing help us to have this practically flat revenue in 2023. And I would like to highlight that in February of this year, we already made a price increase of 9.49%. That helps the numbers in 2024. On slide 12, we can see that reduce, reveal, resilience mail revenues, as pricing compensate softer volumes. What this means? In the regular mail, we saw volume change of 9%, but the average revenue per item grow 9%.
In competitive mail, the volume change -7.2%, but the average revenue per item grow 6.6%. This also show the current universal service contract is predictable, and we can manage this in a good way. Saying this, we are always concerned to add additional customer measures to deal with inflation and against the backdrop of purchase revenues. We see in 2023 a reduction in costing from EUR 22.1 million to a total of EUR 428.1 million to deal with the inflation we saw in 2023. This results in EBIT of EUR 6 million in 2023.
Part of this cost control measure comes from the reduction of 316 people in 2023, and approximately 200 in 2024 that will help us to achieve the results in 2024. On slide 14, we can now look at the financial services, as you, as João Bento was saying, and everybody knows, we have a very good first half of the year in 2023, and we see that less attractive rates and the streaming cap have an impact on placement in the second half of the year. In the first quarter, we are placed EUR 333 million of public debt. This resulted in EUR 18 million of revenues and EUR 3.5 million in EBIT, with a margin of 43.8%.
We believe that the competitiveness of the public debt will improve through this year, the way when you look for the reduction of the banking costs, and even a possibility future change of the product during the year. And for that, we already have our digital offer in use by family and friends. So we already developed our digital offer for our app for CTT. So right now we are just testing with some persons. And also, for the first time, we're going to have a marketing campaign, so to show the importance of this product align with the IGCP.
So that way we, we are true believer that we truly believe that we are prepared when the competitiveness of public debt change during the year to attack the markets, even from our stores or for our digital platforms. Even so, at the same time, in this business area, we are continuously focused on selling more insurance and health plans that help us to diversify our offer, like we have been done in the different segments in Express and Parcels. And now I pass the word to Pacheco, our CFO.
Thank you, João, and good morning. On page 15, we can see the bank KPIs, where we continue to pose the steady progress to our medium-term targets and for 2025, be it in a number of accounts or business volumes. In accounts, we grew 45,000 accounts on the year, and that put us in the average trading per quarter on the top end of our guidance range. I mean, business volumes, we grew more than EUR 1 billion, and that also put us above the top end of the guiding range, and as such, a good performance on that front. On the next page, we can see more details on the bank loan volumes, with a very impressive progress on customer resources.
On customer deposits grew almost 38% ahead of the market, that declined 1.5% during the year, and completely aligned with our strategic focus on customer deposits. Auto loans with a very healthy growth as well, with growing 13.2%, and mortgage volumes growing also more than 10% in 2023. On the next page, we can see the key financials of the bank, where we see a very strong progress on revenues, driven by volumes and expansion of net interest margin. That's now stood in 2023 in 2.9%.
Revenues growing more than 17%, and that led to the expansion of our EBIT, that stood above EUR 25 million, growing 76% on the year, and bringing a return on tangible equity of 8.8% for the full year, and closing to our mark of being above 10% in 2025. On page 18, I won't spend much time here. We think it was important for you to have the numbers that enable you to think around the exit of the universal partnership, and we put here the main impacts for you to model it. On page 19, we can see our already announced commitment on ESG.
For France, as you know, climate change, caring with the people and diversity, the focus on local community and leading ESG operating model on government. Page 20 shows our progress towards those targets, where we continue to invest on the energy transition, being it to our most important focus of all, where our electric fleet is approaching the 20%. 2024 will be a key year on the expansion of that number. We are clearly in line to meet our target of 50% in 2025, and then a 100% on 2030. Our carbon emissions, despite this very impressive volume expansion on parcels, continue to reduce. We are already below the 2025 target, but we commit to reduce to 55% until 2030.
And our efforts of decarbonizing will continue, and we are very committed to progress towards our target. Then gender parity, we consider ourselves already to be within the guide, the range of parity. Nevertheless, we continue to progress on measures to promote the less represented gender in order to be more and more within this range. On recycling of reusable packages, also above our target, we reached 82.4%. And on volunteering, we continue to show progress, growing 42% year-on-year, on the number of hours of our employees that engage on volunteering. Page 21, to show the progress that we are making on the next taxonomy requirements that will come into force next year.
We can see on the left part of the slide that the investments that we are making in energy transition progressing and to be more and more share of our revenues and of our costs aligned with the taxonomy. And on the right-hand side, the initial outputs of our materiality analysis, where we show where we will focusing our energy going forward. Then, moving on to the financial review on page 23, we start with our main KPIs, where we can see that the fourth quarter last year was very strong quarter on revenue progress, where we grew more than 10%, 10.6% to be exact. Our recurring EBIT, unfortunately, declining 24%.
That is, the reason of a very difficult comparable, as you know, in financial services on the fourth quarter last year, where we placed more than an average year of public debt. On our net profit, reach on the year EUR 60.5 million, and a very steady progress also in free cash flow, that's to the EUR 94.4 million. Let me just a couple of remarks on tax, because we have a very dramatic decline on taxation, and that can lead to some questions. So let me take the opportunity to clarify. It's basically a EUR 7.1 million of deferred tax, coming from the tenant lease back operation that we made in preparation to the our real estate transaction that we closed on the beginning of the year.
That explains the main difference on the sequential difference between the two years. There is also an increase in the tax credit related with two CCs. That is the innovation related tax shield that we get from innovation projects. Moving on to the next page, where we see revenues. So first quarter, a very impressive progress on parcels, growing 56% with volumes in Portugal progressing more than 14% both on revenues and volumes. Spain continues to accelerate. We more than double our revenues and more than double our volumes as well, and that reached 127%. We continue to gain share in both markets with the markets still progressing although the e-commerce market growing less than Portugal.
As João mentioned, the market, the Portuguese market is converging faster than Spain, but that means that we should have gained share with some meaning in Portugal. We growth across all sectors, and a good progress on the diversification of customers in Spain. That is something that we always monitor very closely. Mail and Other declining EUR 4.4 million. Half of that decline comes from business solutions, the other half of a small acceleration on mail volumes, especially on the financial sector. That explain half of the decline. On the full year, address mail declined 8%, almost in line with the progress on the fourth quarter.
Nevertheless, on the year, we think we could, based on the new pricing formula, achieve a very flattish, address mail revenues, which bring us confidence that we can stabilize this business unit going forward. On financial retails declining EUR 13.2 million, with placements achieving EUR 330 million. That is a very difficult comparable, comparison with the EUR 4.3 billion that we placed in 2022. Product remains, with lack of competitiveness vis-a-vis the interest rates and sight deposits or term time deposits in Portugal, and the cap is restricting placements. Things that we see improving throughout the year, especially on the second half, where the market is expecting interest rates to come down.
We are looking to have the cap on the placements removed or at least improved, and that should drive the public debt placements to some normality coming forward. Banco CTT revenue growing to EUR 3.7 million. This is basically the consequence of higher volumes and higher yields, net interest margins throughout the banking sector expanded as well in Banco CTT. And with the increase of volumes, we are seeing very interesting progress on revenues. On the next page, we can see our OpEx that grew 14.8%, mainly driven by parcels. The costs increased 53% below the progress on revenues or EUR 36 million.
We continue to see unit costs in Iberia coming down despite the inflationary cost context. The scale is bringing, it's bearing fruits, and as such, operational gearing is there. We see a very interesting margin expansion, although in the first quarter, there are some capacity issues in Spain that have some consequences on margin, but nevertheless, a very positive quarter on that. Mail increasing EUR 0.5 million. We need to recall that wage inflation on the quarter was EUR 2.6 million, and because of lower volumes in financial services, the cost of the retail stores are less shared by that division.
As such, there is EUR 2 million additional cost that flow back to mail and other, and that explains how we were not able to decline more mail and other costs. That stood flattish during the quarter, despite the revenue decline. Financial services declining 5.7, 5.4 million, and that is basically linked to the decreased activity. Conversely, Banco CTT increased EUR 1.2 million, and that is based on increased activity. Cost of risk on the quarter declined 0.2 percentage points to 1.5%, or 0.9% in the full year, excluding the credit card effect. So, after we should expect below 1% cost of risk going forward. On page 26, we can see our EBIT numbers.
On the quarter, EBIT declined 24.3%, with the anticipated decline of the financial services after the very strong fourth quarter last year. Express and Parcels, and like CTT, the main contributors, growing EUR 6.3 million, more than compensating the EUR 4.8 million mail decline. Higher volume declines and lower contribution from business solutions and higher costs from retail network coming from financial services explain the decline. Financial services also declining EUR 7.7 million after the abnormally high fourth quarter of 2022 and with the lack of competitiveness of the product. In the full year, we posted a very interesting growth of 35.7% with full year EBIT reaching EUR 87.6 million.
On the next slide, we can see the detail of our cash flow. Also a very strong cash flow generation, with EUR 140 million of operating cash flow, growing 15%, free cash flow also growing to EUR 94.4 million, a growth of 40%. We have a net cash position of EUR 39 million, including lease liabilities, consolidated cash, but with free accounts banks in equity method, we have EUR 177 million of debt, including lease liabilities. On the next slide, we can see that we continue to have a very prudent balance sheet, and we have a steady progress of deleveraging on the last years.
Considering the bank, we have a cash position. We normally focus on the right side of the slide, where we can see that we have a still very conservative net debt to EBITDA of 1.44x. And with that, I'll pass you to João Bento to the outlook and final remarks.
Thank you, Guy. Then, if you follow me on slide 30, we are seeing ourselves growing towards the 2025 capital markets day announce targets. We saw 2023 beating the guidance that we gave, and that upgraded twice. And this is going to be the trend, this growth trend will remain both for revenues and margin. And if you follow me on the right-hand side, on the EBIT chart, I would like to call the attention that we have different business lines in different colors. So how do we see these EUR 88 million progressing towards the targets, the 2025 targets?
Certainly, mail will slightly improve for the reasons that we already mentioned. We see the price forms are now as a great contributor to a stable profile in terms of revenues and the efficiency measures that we are introducing and increasing will certainly allow us to slightly improve the red bit of the column. As for the yellow, financial services and retail, in spite of the avid contribution from insurance, we will see certainly a convergence towards normal placement levels on public debt, so yellow should certainly shrink.
And then we have both the bank and Express and Parcels steadily growing and establishing themselves as they did in 2023, as the most important growth levers for the company. So we see a growing revenue and EBIT trend towards the 2025 ambition. Moving to slide 31, we wanted to stress that we can support this kind of growth, and we will keep investing on our own business. We have a wide balance sheet capacity, as we've seen, and Guy already illustrated how we have been lowering our gearing. And we are now discriminating between the types of investment.
So this chart on the left-hand side has a selective CapEx, whereby the baseline CapEx is lowering, and probably rely at the 20% level, but the transformational CapEx will increase. And the key areas of investment on the right-hand side will be, of course, the increasing sorting capacity across Iberia, because we need to keep investing on capacity to support the growth on volumes and on market share that we keep pursuing. Also for the developing of the net-lockers network in Portugal, and now initiating that in Spain. We have just closed the first deal to start expanding into Spain, but also, and very significantly on investment in IT, to drive customer experience and operations efficiency.
Our activity is more and more based on technology and mostly on IT. And so we should see a profile of significant investment on IT going forward. The same for reinforcing quality of service, in the sense that we, well, commercial success on parcels is a direct consequence of quality of service, and the pricing, of course, but also on mail. And finally, because we need to revamp Banco CTT hubs and upgrade the core platform and digital channels. This Banco CTT times two is a function of exactly those two new strengths in terms of upgrading the commercial and also the physical platform, and the digital channels.
Therefore, we see the comfortable balance sheet allowing us to support growth along these lines. If moving to slide 32, a note on the shareholder remuneration. We see our dividend growing combined with the opportunistic share buyback. This is a general trend that we have announced. Actually, again, on the Capital Markets Day, we have announced not only a dividend policy, but also the main principles that should guide the shareholder remuneration. Namely, we need to keep space to invest on business growth.
We need to attractively remunerate our shareholders, and part of that is that we could combine a steady dividend associated with net results, net income, with opportunistic share buyback. And this is what you can see. There is a significant increase on the proposal to the general meeting of shareholders for the dividend. The EUR 0.17 that we are suggesting is not only a significant improvement, the 36% increase on last year's dividend, but it also remains within the remuneration, the dividend policy that we have stated, and we believe that this consistency, in fact, that we have a policy and we stick to it, is relevant.
On the other hand, we are, as you know, well about to close the second share buyback with further amortization of shares. And we see this trend, if we have available cash, to remain and to continue. And finally, if you join me on our last page, in a nutshell, I would like to share that we have been able to show very strong 2023 results. And moreover, we are providing a guidance that guides us towards the goal set in the Capital Markets Day.
And so going top down on parcels, we are, we were, and we keep developing this trend, the top performer on Express and Parcels in Iberia, with record growth driving market share gains both in Portugal and Spain, and a significant margin expansion, mostly in Spain. And so great year for Express and Parcels and the trend that we see present again for this year. On mail, we have approved a price increase, the highest price increase ever. And that combined with the mix development enables stable mail revenues, and with stable mail revenues, we will have to, and we will deliver an improvement on EBIT.
Moving to the retail network, we are expanding our insurance distribution, as I said before, and João Sousa already highlighted, while public debt placement remains below regular levels, although we see, especially in the second quarter, all signs, well, guide us towards an improvement on placement. And, of course, growth in Banco CTT clients, volumes and profitability, will be the trend this year for the bank towards the recently upgraded 2025 targets. We have been able to exhibit a strong and steady cash flow, so this leads to improved financial flexibility, and this is important not only for remuneration, but also for investment in growth.
And talking about remuneration, this 20 million share buyback ongoing and the dividend of EUR 0.17 to be proposed to the general meeting is in fact, we believe, very good news. We had strong results this last year. We have beaten a guidance that we upgraded twice, and so we believe this was a great year. Finally, what shall we expect for this year? Well, on the back of a strong growth in Iberian Express and Parcels that we keep looking at in a very optimistic way, we expect recurring EBIT in 2024 to be above EUR 88 million, assuming public debt placements of EUR 3 billion.
Thank you for that, and now we remain available for Q&A.
Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We'll now take our first question from João Safara with Banco Santander. Your line is open, please go ahead.
Yes, hi, good morning. And congratulations on these results, which were a very strong performance. So, my first question would be basically trying to get some more insights from your guidance. And mainly, you mentioned that you expect mail to slightly improve. If we could have any idea of what would be that kind of improvement, and also linking this with the cost savings that you mentioned in the presentation of EUR 6 million. So my question here is just if, on a ceteris paribus basis, just should we expect this EUR 6 million delta for 2024, or this is the accumulated figure from 2023?
So if you could a bit help us understand that in the mail side. And then also two questions related to the guidance. The first on the pro forma figure for Banco CTT. You've, I mean, it was very useful, you showed us the EUR 26 million excluding the car portfolio. I would also wanted to ask the pro forma figure without Payshop, if you could to give us an idea. And then just finally, on again on the guidance, on Express and Parcels, are we expecting double-digit growth or not? Okay.
And then, related to this, and just as my final point, we've seen in the fourth quarter another, I mean, another quarter where I don't know if there were market share losses to new offerings that are out there, but it seems that half of... So you're placing only half of what is the public debt placements out there in the market. And considering this, and also the run rate, and I understand that you expect the limits to be removed. But I mean, it just seems a bit optimistic, the EUR 3 billion placement for 2024, just based on this. But probably I'm missing something that you can enlighten me. And those are my questions.
Thank you.
Hi, João. Thank you for your questions. Starting on mail. So we, on slide 13, we showed the annualized EBIT impact of the head count reductions. So it's, in total it's EUR 10 million. The 2023 numbers will flow to P&L on the full year of 2024. On the six million part will flow during 2024, not fully. We are not giving, as usual, guidance by business unit. We expect expansion of EBIT on mail, as João mentioned. That will come from the savings, but please take into account that we also have some offset of these, because of wage inflation.
We already agreed with the union with 4.4% salary increase for 2024, and that will offset part of the savings. But between the operational gearing of lower volumes on mail, plus the efficiency measures that we have in place, we expect expansion of EBIT of mail in 2024.
Please, on comments. Go on.
On the bank, so you have the numbers there, of the credit card. On Payshop, we have on the full year of 2023, EUR 4.5 million of EBIT, coming from Payshop on the bank and payments business units that we reported on the full year of 2023. Regarding the public debt market share that we refer and with our future prospects on the product. First, on the share, we right now, we believe that the reporting of the subscriptions in public debt certificates, it like, it's not the most transparent way, because on the placement IGCP also include the capitalization of interest that is accrued to the stock every quarter.
We believe that number is between EUR 50 million and EUR 70 million per month. That explains why when you have a declining profile of placement, the market share of CTT is declining because that number is broadly flat. When placements decline, our share also declines because of that effect. We are asking IGCP to improve on the transparency of that report. Let's see if they can help us on that, because the share we see is not the same as it translates on the report.
Regarding the product evolution, we think the expansion of the cap, in a way, was caused by this new government transition, and as such it was a decision that was not taken in time for the beginning of the year. The state budget has two numbers regarding public debt. The first one is they expect placing EUR 3.7 billion this year, and they have an authorization to place up to EUR 7 billion this year. The combination of the increase of the cap, plus what we see, a declining interest rate environment in the second half of the year, should improve the competitiveness of the products.
As such, we are confident that we can start increasing the volumes of placement, and as such, meet the EUR 3 billion threshold that we mentioned on the guide.
Yeah, João, just before going to the Express and Parcels growth, a complimentary note. We, on top of the expression provided by GE, one, we have already received comfort by the IGCP that they will change their report, so this will become more obvious sooner than later. And also, in broad terms, we believe that the percentage of placement, new placements by IGCP is very much in line with what used to be in the past. So that should be in terms of market share, so that will help you in terms of modeling. Regarding the express and parcel, the answer is yes.
So we see ourselves growing in double digits in both geographies, and we see that this is our expectation, and we are very confident on that.
Thank you. Just a follow-up for Guillaume on this, the EUR 3 billion placement, this is for... I mean, this is your placement, right? It's not the IGCP number.
Mm-mm. The EUR 3 billion, it's our placement, yeah.
Okay, perfect. Thank you.
Thank you. We'll now move on to our next question from Joaquin Garcia with JB Capital. The line is open. Please go ahead.
Yes, hello. Thank you for taking my questions. I just wanted to have a bit more information on the express and parcel growth. Is that going to come all through volume, or is price finally going to have a positive impact on 2024? And then, for your dividend, you've decreased the payout ratio. I know it's still in your guidance, but it's lower than last year. Is there a reason to it? Do you have... Are you working on any operation or something, for which you need the money for this year, or is just to be prudent? And then, as you did last year, nothing appears, then you'll do a share buyback. Thank you.
Starting with the first one, I leave the last one to João Bento. Well, I think it's important for us to understand that pricing in parcels is completely correlated with the weight of the packets or the size of the parcels that we distribute. We have been seeing in the last couple of years an increasingly smaller packages flowing through our network, and that is also a factor of the out of Europe, so of the Asian packets that are more and more a share of the market. And as such, the parcels are slow smaller, and the price per unit comes down, not because of pricing effect itself, but because of the size of the parcels.
That in a way poses some challenges in cost efficiency, although the smaller packets also drive efficiency in some parts of our cost value chain. But we are not expecting dramatic increase in price per parcels. If anything, probably still a dilution this year because of this big growth on the back of the second half of the year, was mostly an out of Europe packets, and as such, with smaller parcels. So the growth will come mostly out of growth on volumes.
Okay, Joaquín, regarding the decrease in payout ratio, and if it is related with us needing that money for acquiring something, which was, I believe your question. So let's see. We are very proud that we've been able to announce the dividend policy and stick to it. So first of all, we are within the dividend policy, and this also is one source of credibility.
The fact that we have lowered the payout this year within the dividend payment policy is because we had an extraordinarily high net income, and we thought that the absolute increase in the dividend was enough, and also enables us to see a dividend that will be somehow steadily growing and not being very volatile. So this combination of an absolute increase that provides also by chance, by coincidence, a decrease on the payout, but within the policy, seems to be absolutely fair, and we are very convinced that this was the right decision. As for the second part of the question, I will guide you back to the principles.
We say that shareholder remuneration should be a combination that allows us to keep investing on our business growth, attractively remunerate shareholders. And that includes the business growth, of course, capacity, investing on our own business and M&A, if necessary. And we have space enough in the balance sheet within the leverage limits that we have established for ourselves to also go for M&A. So, there was no restraint or constraint that guided the decision of proposing a dividend of EUR 0.17, because with this dividend or the higher dividend, we can still using our leveraging capacity and available cash to do whatever needs to be done.
Perfect. Thank you.
Thank you. And we'll now take our next question from Filipe Leite with CaixaBank. Your line is open. Please go ahead.
Hi. Hello, everyone. Sorry. I have three questions, if I may. The first one on Express and Parcels in Spain. Because despite the strong top line increase in this quarter, in fourth quarter, the EBIT margin when compared with previous quarter, the EBIT margin dropped. What was the reason for this decrease? And if you can share with us what is your internal expectations regarding margin evolution on this unit, specifically in Spain for this year? And also if you can share with us the current market share in E&P, in Portugal and also in Spain. Second question on Banco CTT, and how is the process of the capital increase from Generali? And when will start the exclusivity distribution that you agreed with Generali for life and non-life insurance products?
And last one, also related with the bank, because looking at the balance sheet of the bank, we see EUR 3.1 billion loans, one point six billion... Sorry, EUR 3.1 billion deposits and EUR 1.6 billion loans. Can you tell us in what assets are invested the extra EUR 1.5 billion, and how much is it contributing to, to your earnings? Thank you.