Good afternoon, ladies and gentlemen, and welcome to our Capital Markets Day. Of course, we would have preferred a face-to-face meeting with lots of you attending here in Frankfurt, but I'm sure this virtual format will still allow for a good session and helpful dialogue. Before I run you through the agenda, please take note of the usual disclaimer regarding all the content today. We've planned for a three-hour event, and we'll start with the pre-recorded presentations from all the members of the Board of Managing Directors. Our new CEO, Manfred Knof, will start with the overview of the strategy and our ambitions for the next three years. The other board members will then present their more detailed plans for their lines of responsibility before Manfred concludes with the transformation steps. We estimate this will take about two hours.
All the presentations can be downloaded either from the webcast page or from our investor relations website. The slides in the background of the speaker are a little bit lighter to ensure better visibility. After the presentations, we've allowed approximately one hour for the live and interactive Q&A session. All the board members will be on stage and are looking forward to your questions. Without further ado, let me now hand you over to Manfred Knof, our CEO.
Dr. Manfred Knof is a scholarship holder of the Konrad Adenauer Foundation for both law studies and PhD at the University of Cologne. In 1995, he received a Master of Business Administration from the Leonard N. Stern School of Business at New York University and completed the Advanced Management Programme 163 at Harvard Business School in 2002. From 1996 to 2017, he held various senior management titles at Allianz Group, including Dresdner Bank, where he also served as CEO of Allianz Germany from 2015 until 2017. In early 2019, he joined Deutsche Bank, where he was heading up the private bank Germany. Dr. Knof joined Commerzbank in January 2021 as Chairman of the Board of Managing Directors.
Good afternoon, everyone, and a warm welcome from my side to our Capital Markets Day. When I was appointed as CEO of Commerzbank, I took the time last year to prepare for the job. I did my analysis and was keen to learn whether what I was reading about Commerzbank would bear comparison to the reality in the office. I'm pleased to say there haven't been too many adjustments, and my key perception has been more than confirmed. Commerzbank is a great institution with a very strong franchise that has a lot of value to be unlocked. Our core market in Germany is one of the strongest economies in the world. The country is doing well in the crisis, and I'm sure this will also pay off for Commerzbank once the crisis is over. Client relationships, especially in the German Mittelstand, are exceptional.
This bank is a trusted partner for its customers. Commerzbank is a clear leader in banking for the German Mittelstand. Furthermore, Commerzbank has built up a high level of digital competence. Comdirect is a super strong asset that can be leveraged in the group. One thing is also clear: over the past years, Commerzbank has significantly reduced its problematic assets and cleaned up its balance sheet. If we tackle the weaknesses of low profitability, a weak execution track record, and a lack of performance culture, if plans and announcements become actions and results, if we succeed in playing to our strengths and developing our potential, I'm absolutely convinced that this bank will see a successful and independent future. Obviously, this doesn't come by itself, but requires clear priorities and tough decisions to pave the way for sustainable success. We need an ambitious restructuring plan.
The team has already worked hard on this, and together we have sharpened the program. Not only ambitious, but also achievable targets lay the foundation for future success. Second, the plan itself does not create the value. Rather, it is the stringent and rapid execution that creates value. We must implement our plan with determination and consistency. I believe this is our most important task ahead, and this is what I stand for. I will make sure that we meet our milestones and show steady progress. From quarter to quarter, we will update you with our execution achievements. Rest assured, there will be visible progress in the implementation in the course of this year. Speedy, reliable, and consistent implementation, that is what I stand for. I will come back to this in more detail later.
Third, our plan comes with a massive transformation of the organization and our business model. We will focus on our strengths and increase efficiency across all areas of the bank. As a result, we will see a future-proof Commerzbank that is lean, digital, and focuses on our core client franchise. We are combining a clear alignment to the needs of our private and corporate clients with maximum efficiency. In this way, we are creating the conditions for being able to shape our own future as an independent force in the German banking market. Our targets for 2024 are ambitious. We will take out €1.4 billion from our cost base. This is more than 20% and involves a gross FTE reduction of 10,000 FTEs, primarily in our domestic operations. This requires overall restructuring charges of €1.8 billion, which we will fund completely with our existing capital.
Based on this deep restructuring and the transformation of the business model, we target a return on tangible equity of 7% by 2024. With strict RWA management, we will also create excess capital of up to €3 billion and still run a substantial buffer of 200 to 250 basis points above MDA. Our aim is clear: by 2023 at the latest, we want to return excess capital to our shareholders by means of dividends as well as share buybacks. The latter, of course, are subject to receiving the prior permission of the ECB. The strategy toward these targets has clear levers. In private and small business customers, we will combine the best of two worlds: Comdirect's high digital standard with Commerzbank's recognized advisory expertise.
This is how we create a new type of offering in the German banking market: a unique combination of a high-performance direct bank with a first-class advisory service. Daily banking through digital channels has become the new normal. During the pandemic, we have seen a significant increase in the usage of online and mobile banking. This will not reverse. By leveraging the strengths of Comdirect, we will offer the efficient digital services of a direct bank to all of our 11 million customers. This allows us to operate with a much smaller branch network without facing too much revenue churn. We will cut our branch network down to 450 branches compared to the 1,000 branches we had before COVID-19. At 220 of the remaining branches, we will offer our personal advisory service for premium clients.
By focusing our top sales staff on the wealthy clients and entrepreneurs, we will increase business and revenues with these attractive client groups. This is a framework in PSBC for an offer that meets the needs of our customers and takes us to a whole new level in terms of efficiency. In corporate clients, we will build our strategy on our acknowledged strengths, namely the strong relationship with our core clients. We are the leading bank for the German Mittelstand. Commerzbank is firmly rooted in corporate banking in its home market. This is where we generate a large part of our earnings, using our capital efficiently and with highly satisfied customers. This is why our clear focus will continue to lie precisely here in the future. We will clearly focus on German clients and clients with German connectivity. They form the value of our franchise.
We will remain their reliable banking partner of choice, and we have the positive aspiration to take on additional businesses. But it is obvious: strong partnerships require mutual benefits. Every single client relationship must contribute to our return target. In that sense, we will clearly put profitability before growth. While focusing on the needs of our core clients, we will also increase the cost efficiency of our setup. All products and international locations that are economically not viable will be streamlined or closed. We will streamline the entire product portfolio to reduce costly complexity. We will reduce the oversized international network by closing down 30% of locations. We have already started the significant reshaping of our network abroad this year. The resulting cost efficiency is a major building block for the corporate client strategy, but a significant increase in RWA efficiency is equally important.
We have already started to review each and every client relationship on its return profile. In future, we will only deploy capital in client relationships that provide us with a decent return. So, in corporate clients, our strategy is about combining a customer-oriented approach with maximum efficiency in cost and RWA. This will deliver substantial value to the group and its shareholders. Ladies and gentlemen, both client-facing segments will increase their efficiency level, and so will operations and head office. This is based on a lean setup, reduced complexity, and digitalized end-to-end processes. It leads to a reduction of more than 20% or 2,900 FTEs in operations and head office. Efficiency is also the name of the game in the development of new functionalities. We have already bundled all necessary resources end-to-end in our delivery organization. Now it is about cost-efficient sourcing and faster time to market.
Based on these end-to-end processes, the delivery organization plays a major role in building the new bank. In the next four years, we will invest €1.7 billion into change-the-bank projects. These investments are the most important fuel for the massive transformation of the business model of Commerzbank. As I said at the beginning, this is a transformational program that requires stringent and rapid execution. This is why I have already established a transformation office and appointed our chief transformation officer, who will directly report to me. Holger Schulte knows the bank inside out and will play a major role in executing the program. Let me point out that I will also take time in the upcoming months to investigate further opportunities to increase the profitability of our bank. This will be an ongoing process.
Now, let me summarize our strategy 2024 alongside the four cornerstones that characterize the future model of Commerzbank and define what this bank will stand for. First, customer-centric. We are solely focused on the needs of our core clients. We are, and we remain, the number one bank for German clients. We aim to become the digital advisory bank for Germany. We offer a differentiated client coverage model alongside target groups and banking channels. As the leading bank for corporate clients, we are committed to serve the German Mittelstand. For our premium clients in PSBC, we offer first-class advisory. Second, digital. We are building a state-of-the-art digital bank by leveraging the Comdirect model in PSBC. We are offering our customers the ability to buy their products completely digitally. We are accelerating the development speed for the technology of our digital bank.
We are focusing on future-proof and innovative technology such as cloud computing. Not only in PSBC, we will also significantly extend our digital offering for corporate clients. Third, sustainable. Sustainability is a central building block of a strong and, above all, future-proof Commerzbank. Not only because we as a company have a high responsibility and can only counteract climate change if we all work together, but also because we use it to meet our customers' requirements and our investors' attitude towards sustainability. We are not beginning here at zero. Commerzbank already has many examples that show the importance of the topic for our bank. But we want to do much more in the future. That is why I have placed sustainability management directly in my area of responsibility, where it belongs in the strategy department. Our ambition is clear.
We accompany our customers in their sustainable transformation and support them with our full know-how. We will manage our credit portfolio according to the Paris climate targets of well below two degrees. We lead by example and are pioneers in eco-management. We are currently preparing a comprehensive framework and will present our company-wide sustainable strategy later in the year. Fourth, profitable. Creating shareholder value is, without doubt, the most important pillar and a prerequisite for sustainable future success. As a first major step, we target a return on tangible equity of 7% by 2024 and create a potential of up to €3 billion for capital return to shareholders. Ladies and gentlemen, this is an ambitious plan and a realistic one. We know that at the end of the day, it is all about execution. We could not be more determined to deliver.
I will elaborate on our stringent execution path toward the end of our presentations. Now, my colleagues will run you through the details of the strategy, and Michael is going to start with corporate customers. Michael Kotzbauer started his career at Commerzbank in Frankfurt as an apprentice in 1990, followed by a trainee program. In parallel to this, he studied business administration at Frankfurt School of Finance and Management. During his career with the bank, he has held numerous management positions. From 2010 to 2013, he was Regional Board Member for the corporate clients business in Asia, located in Shanghai. Until 2015, Mr. Kotzbauer was Divisional Board Member and responsible for large corporates in southern and eastern Germany. Past this appointment, he represented the central and eastern German regions of the Mittelstand Bank. In January 2021, Mr.
Kotzbauer was appointed member of the board of managing directors at Commerzbank, responsible for the corporate clients business segment. Hello and welcome. May I say that I'm delighted to be heading the corporate client division of Commerzbank. It's my personal aspiration to lead this division to its former profitable status. I'm very familiar with the needs of our clients and confident that Commerzbank is well positioned to continue serving them. Nevertheless, I can't ignore the challenges we're facing. Over the last few months, we formulated a new and focused strategy that will help us to strengthen our leading position in the German Mittelstand business. We are a highly respected partner in cash management, and we are helping our German corporate clients to do business in international markets. Commerzbank is handling more than 30% of Germany's foreign trade business, another stronghold of our bank.
However, to leverage these strengths, we seriously need to address our challenges. The complexity of our segment is far too high. Revenues have been shrinking while the cost base remains on an unacceptable level. We also have a large variety of products, which creates the already mentioned complexity and cost, despite the client demand being limited, running a costly and undifferentiated coverage model. And probably the biggest challenge we're facing is that our overall RWA portfolio is yielding too low. All this is reflected in our strategic program. In order to transform our business towards higher profitability, we will focus on six strategic priorities. First, German corporates are and will remain at the core of our strategy. Additionally, we are serving international clients with connectivity to Germany.
Second, to further differentiate our approach and to best serve the needs of our client portfolio, we are following an advisory proposition on the one hand and a digital banking proposition on the other. Third, we will refocus our international footprint while still covering the most important trading corridors for all our clients. Fourth, we will improve our product offering strictly along our clients' needs by streamlining and digitizing our product universe. Fifth, we will increase our profitability by using the power and advantages of advanced analytics. Finally, we will pursue an active RWA management in order to improve the capital efficiency. Let me go through these strategic priorities in some more detail. We are firmly rooted in Germany. Our 26,000 German Mittelstand clients are at the heart of our strategy.
This is where we have around €40 billion for RWA and achieve a significant part of our revenues with a, and that's important, comparatively high RWA efficiency. But the revenue distribution within the client base is too unbalanced. The top 10% of our customers generate 80% of our revenues. But what this means as well is that the remaining 90% of our clients represent a huge business potential going forward. In addition, we remain closely linked to international clients with a connectivity to Germany. International clients who don't have connectivity will only be served if they're active in selected lead sectors with significant future potential. These sectors are in line with the definition of the German Ministry for Economic Affairs and Energy. They are mobility, sustainability, communication, life science, chemicals, and capital goods.
In short, this means that we will exit relationships with those foreign companies that do not meet these criteria. With regard to our institutional clients, we will further optimize our network of correspondent banks and selected non-bank financial institutions to serve our top clients with trade products and market placement capabilities. A key lever to becoming more profitable in the business with our German clients is a new coverage model. Personal advisory continues to be a core element of our business model. But through a differentiated approach for each client group, we will be more cost-efficient and will, at the same time, create revenue opportunities. On the one hand, we're following the advisory proposition, and on the other, a digital banking proposition. The level of support depends on the intensity and profitability of the business relationship, as well as the product needs and advisory requirement of the clients.
Our 19,000 core clients will continue to receive personal support. Within this portfolio, we have identified 3,000 high-value clients with which we expect to grow revenues by up to €60 million until 2024. A further main driver for our improving revenues is the expansion of the sector coverage model towards 400 large German international clients. They will receive dual coverage from sector specialists with deep industry knowledge and corporate finance expertise, as well as from the relationship manager with local expertise. This dual coverage will result in a further revenue uptick of €50 million. To become more efficient, we are refocusing our product specialist setup and reducing our respective full-time employees by 30%. By the end of 2024, roughly 850 people will work in our specialist organization down from 1,300.
Clients with a need for very standardized products and a low demand for advisory will be best served by our digital banking proposition. Here, we will meet the evolving digital client expectation. We will create synergies with a small business customer segment by mutually developing products and services and sharing one IT platform. Within our digital banking proposition, we will focus on a fraction of our product portfolio. The remaining product offering will be tailored to client needs and will ensure an outstanding digital experience. The cost to serve is expected to decrease by around 70%. In the beginning, we expect to serve roughly 7,000 clients via our digital approach. We'll operate with a load ratio of 1 to 500. However, all products and services launched for our digital approach will also be available for the entire client base.
With the measures outlined, we expect to reduce costs by €100 million and lift a revenue potential of €110 million. Our third strategic lever affects our international reach. We remain the international partner of choice for our core clients. 25% of our top clients' revenue arrives from international products. Therefore, we'll continue to cover the most important trade corridors. But within our international reach, we need to reduce cost, complexity, and improve RWA efficiency. We intend to exit 15 international locations and to convert two branches into representative offices. Accordingly, the bank will be present in almost 40 countries going forward, down from 50. Please understand that today, I can't make a specific statement as to which locations will be affected since we want to talk to the regulators first. Our remaining locations abroad will be optimized.
We will introduce a lean branch concept and intensify our nearshoring activities in two cost-efficient regional hubs. In total, we will reduce our headcount in the international network by almost 130 front office employees, and we expect to transfer more than 220 employees to the cost-efficient hubs just mentioned. To sum it up, due to a reduced international presence, we will see a revenue churn of close to €300 million. This will be almost completely offset equally by revenue growth in Europe and the USA and a significant cost reduction in front and back office units. Furthermore, we will free up RWA of more than €4 billion to reduce the capital intensity of our international network. Our fourth strategic lever is an improved product offering. As said, our product universe is too complex.
Therefore, we will streamline our product offering by stopping those products that are of little relevance to our core clients or that are not part of our core businesses. We will explore options to integrate our equity sales, trading, and research capabilities into an existing or new European platform. On the other hand, we'll establish a mid-cap corporate finance advisory unit in the primary market, focusing on capital structuring, succession planning, and equity capital markets. These measures will, at the same time, decrease infrastructure and support costs while reducing complexity. Let me stress that our clients won't experience any difference in the level of quality and service. We also aim to slim down the IT application landscape for the remaining products. The full digitalization of the trading setup will result in a 50% reduction of trading employees.
At the same time, we'll continuously improve the digital interface with our clients by increasing the number of digitally available products, increasing the number of clients who are using it, and improving customer experience. In short, the fourth lever, our improved product offering, will result in a cost reduction of almost €100 million. Driving profitability through smart pricing and sales analytics is our fifth strategic lever. Big data and advanced analytics will build the base for a best-in-class corporate bank. To this end, we successfully launched customer sales analytics dashboards and a smart pricing tool in Germany. We are establishing analytics-powered sales models to be faster in identifying client needs, to select sales opportunities more efficiently, to be best prepared in negotiation, and more effective in closing deals, and to price new business at an optimum. We already started the rollout in 2020.
Database support creates scope for the relationship managers to do what they do best: offer personal assistance for our customers and that very fast. For example, we have analyzed the international value chain of our clients. With just a few clicks, we can immediately provide appropriate product opportunities. Accordingly, we can explore our clients' use of letters of credit in relation to specific country risks to point out specific gaps and address their needs. As a result, revenues will grow by more than €130 million until 2024. In terms of optimization, we will have reduced the correspondent banking network by another 300 to, in total, 1,300 banks. We also have trimmed down our central functions within corporate clients by the end of 2024. Finally, let me now turn to our strategic lever number six: active RWA management.
We absolutely share the view of our investors that we need to improve RWA efficiency. We have grown our RWA base in recent years, and we will now make sure that the return profile improves. There's a significant variation in RWA efficiency across as well as within client groups. One-third of credit RWA has a satisfactory efficiency of above 5%. However, approximately one-third of our credit RWA are currently not yielding sufficiently. We will continue to tackle this portfolio name by name. Either we come up with visible potential for additional cross-sale or increased margins to lift RWA efficiency. This would be our and my preferred outcome. But if not, we will exit the client relationship and free up RWA and capital. Our clear target is to shrink this low-yielding RWA bucket to around 22% by the end of 2024. A further initiative for sectorization.
Since mid-2019, we have already released more than €4 billion gross RWA release and still plan to further release more than €2 billion until 2024. Additionally, we will apply active and stringent collateral management and CVA hedging. Overall, we expect to reduce the RWA portfolio from €90 billion to €84 billion by the end of 2024, including the expected regulatory impacts of almost €10 billion. We actively reduce RWAs by around €15 billion through divestments. The main drivers here are strict RWA management and the streamlining of our international footprint. A further relief of €8 billion is expected to come from the post-COVID recovery of the economy and improved ratings.
We aim to reinvest €7 billion RWA into business, especially with smaller SMEs in Germany, since this is the market segment where we can build on our leading position and already have high RWA efficiency. Despite this significant reduction in RWA, we plan that revenues will only slightly decrease until 2024. The gross revenue decrease of €300 million due to active RWA management and the right-sizing of our international reach will be mainly offset by the profitability initiatives I've just described. On the cost side, all these initiatives, including a streamlining of employees in the middle and back office units, will contribute to an overall cost reduction in the corporate client division of €600 million, arriving at a cost base of €1.9 billion by the end of 2024. Overall, our new strategy will result in a cost-income ratio of 62% by the end of 2024.
This is an improvement of 18 percentage points compared to 2020. This compares fairly well with our European peers. We will reduce employees by 900, which is roughly one in four. By 2024, we will have achieved a substantial reduction of our international footprint, a strict focus on German connectivity and lead markets, a differentiation of our approach to serve our clients, and an optimization and digitalization of our product offering. Based on the improved cost-income ratio and the significantly reduced RWA base, we target a return on equity of 8.7% by 2024. Let me conclude my presentation by highlighting the key milestones of our roadmap to 2024. This year, we'll focus on a stringent reduction of employees. We want to complete 30% of the overall reduction. We will roll out our sector-focused advisory services for an additional 150 clients.
We will further increase the localization volumes to optimize our RWA efficiency. In 2022 and 2023, we will offer our clients the full benefit of our digital banking proposition, and we will have right-sized our international footprint. We've taken out unnecessary complexity in our trading environment and will have reduced major front office systems down to three applications. Latest by 2024, all Mittelstand clients will be transferred to the new coverage model. Our international footprint will be streamlined, and we will see the full impact of our measures towards profitability. I'm confident that we'll achieve our targets, especially since we've already started to implement some of the measures last year with promising results. We'll strive to create an outstanding customer experience with our future digital banking proposition, which will be available for all our clients.
As with my colleagues, I'm committed to reshaping the future of this division and this bank. Efficient and effective execution are my highest priorities over the coming three years, and I'm passionate about achieving our targets. It's my clear ambition that Commerzbank remains the leading bank for the German Mittelstand. Thank you. Sabine Schmidt-Roth began her career in 1984 as an apprentice at Dresdner Bank, which quickly led to several management positions in the private and small business customer segment, such as securities and advisory and sales. In January 2020, she was appointed to the Board of Managing Directors at Commerzbank, initially responsible for HR and compliance. In September 2020, she was made head of the Commerzbank private and small business customer segment, and she retains responsibility for group human resources.
Schmidt-Roth is also chair of the supervisory board of Commerzbank subsidiaries, Commerzreal and Commerzreal Investment Gesellschaft, as well as being a member of the supervisory board of mBank. Ladies and gentlemen, I'm delighted to present our strategy for private and small business customers in Germany. Before I lay out my plans for PSBC, let me just say how proud I am to be able to lead this division. Since starting in the banking industry 35 years ago, I've always focused on our private and small business customers, and I feel I know them extremely well. My starting point is clear: we've achieved a strong market position in Germany, but our cost-income ratio is too high. Growth ahead of the market is reflected in increasing numbers of customers and assets. At the end of 2020, we have €290 billion in loans and securities volume in Germany.
This is an increase of 19% over the last three years. We enjoy a strong market position with wealthy customers. Regarding assets under management, we are clear number two in the German market. This is a direct positive outcome from our best-in-class personal advice, and also our expertise in direct banking is indisputable, especially given the recent integration of Comdirect. Based on these strengths, we will tackle the cost challenges as well as the unused potential from our strong customer base. If there's any positive outcome from the pandemic, it is the significantly increased speed towards digitalization. This is a clear catalyst for the radical change into the digital and modern business model of PSBC. We've identified four strategic levers that we'll use to successfully transform our business. The first one marks the core of the overall strategy.
By means of a significantly modified sales approach, we will save more than 20% of our costs. Obviously, this comes with material FTE reductions and branch closures. Second, with the integration of Comdirect, we've created a unique blend of business for private customers. Comdirect delivers all the tools for an efficient, scalable, and effective direct banking proposition, while Commerzbank adds superior personal advisory. Third, we'll focus our personal advisory on premium clients. Wealthy clients and valuable small business customers are the main source of additional revenues in the coming years. Fourth, we know that such a massive transformation and cost reduction will come with some customer and revenue churn. But with a comprehensive set of mitigating measures, we'll limit the revenue churn to less than €300 million.
Now, let me walk you through the levers in more detail to provide you with a concrete design of our strategy. We will radically modify our sales model with a focus on profitability. Our model is key for higher profitability. It allows for a much lower cost to serve for the entire client base while tapping additional revenue potential mainly with premium clients. All customers will benefit from our mobile-first principle. Relevant services requests and simple sales transactions will be executed via smartphone. This way, we can increase the share of efficient self-service processes from 10% to around 90%. Furthermore, we establish a centralized advisory center where we'll pool highly qualified experts on a 24/7 basis to provide best-in-class advisory. With all the experience in working from home, there's actually no reason why mortgage loans can't be done on the basis of a video conference.
Hence, we'll increase the share of customers taking remote advice from 25% to around 90%. The third pillar for increased efficiency in our future sales model is 450 advisory points. Customers receive easy and quick advice for non-complex products and can buy them instantly. Service is predominantly offered via self-service zones. These advisory points are lean in costs and personnel and actually replace the former branches. They take advantage of the changing client behaviors and client needs. Additionally, 220 out of the 450 advisory points include a premium branch exclusively for our premium clients. And what do I mean by premium clients? Premium clients are attractive small business customers and private customers with assets under management of €100,000 or more, of which we have more than 650,000. This is where we will have our top sales staff and advisors working on complex banking needs.
With such bespoke advisory services and solutions, I believe we can create additional revenues. Let's take a closer look at our branch network. The reduction by more than 50% of the branches until the end of 2022 demonstrates the radical nature of our new sales model. We've already permanently closed around 200 branches that were initially shut due to the pandemic. About 200 more will follow this year, and by the end of 2022, we'll have reached 450, down from our original number of 1,000 branches pre-Corona. We will significantly invest into the network. €45 million have been reserved for renovation of the remaining branches and also for the remedial work in the closed offices, which is required before they can be handed back to the landlord. Regarding the 450 advisory points, it's important to understand that these also serve as a key mitigant for customer and revenue churn.
Beyond 2022, the number of 450 is not set in stone. Rather, we will have regular reviews on that number and take into account our churn experience. In that sense, I wouldn't rule out that we come up with even lower numbers beyond 2022. The significant reduction of our branch network and the associated impact on the number of FTEs are the main drivers for the overall cost reduction of around €700 million in PSBC Germany. Savings in personal costs of around €400 million are based on a net FTE reduction of 3,500. This shows the impact of the new sales model with more efficient cost to serve. A further €100 million of cost savings reflect other branch-related costs, such as rental costs. The remaining €300 million include, amongst others, IT costs and marketing expenses.
Please note that the expected synergies from the Comdirect integration are reflected in the overall €700 million cost savings. This includes the future avoidance of double spend for marketing and IT. This leads me to the second lever and the digital power of Comdirect. The first leg of our unique blend for the business model is digital. By leveraging Comdirect to the maximum, we will provide excellent customer experiences with strong direct banking capabilities. The time is right for a bold move towards digital banking in mass retail. The pandemic has significantly increased the acceptance of digital tenets in banking today. Today, we have 80% of all our client contacts in the branch-based bank already online or mobile. More than 70% of all our payment transactions in the branch-based bank are digital. In the market, more than 55% of all security trades find their way online or mobile.
By leveraging key features of the Comdirect model to all our 11 million customers, we can take advantage from this development. Let me pick one of the key features of our future approach: the interaction of all channels. Our customers will have a seamless and unified customer experience across all channels. Through data and customer intelligence, sales initiatives will be routed to the right channel at the right time. Information about customers is available in all channels at all times. The transfer to other channels will be done without friction and without loss of information. The customers will experience the transfer between channels as secure, comfortable, and intuitive. Our channel management is controlled through Microsoft Dynamics and DCRM, so our digital customer relationship management. This approach is unique in the whole industry.
The second leg of our unique blend is our focus on growth with premium clients, and this brings me to our third lever. Statistics and market research tell us that asset growth for the vast majority of people in Germany is muted. However, on the other hand, what we are seeing is that wealthy households are accumulating more money. We see an annual 2% asset growth of premium clients. As I've said, these are wealthy customers and entrepreneurs with assets under management of at least €100,000. We are actively targeting this client group with our individually tailored customer care and our superior personal advice. This will help us to increase our share of wallet and gain additional premium clients. This is the key task of our top sales staff, who will be situated in our 220 branches for premium clients.
Moreover, our premium clients will also benefit from the enhanced digital offering, leading to an overall excellent client experience. Based on analytics and big data, this allows us for double-digit growth in loans to small business clients as well as in securities. With targeted promotion of our unique client proposition, we will clearly support this asset growth. Ultimately, this asset growth will lead to additional revenues. Another key source of additional revenues is the pricing of our payment-related products and services, which should result in increasing recurring fee income. An important point of the new pricing model is, for example, that we will no longer unconditionally offer accounts free of charge. The basis, however, will still be an attractive product that is linked to activity-based fees. On top of that, clients can choose additional features such as packages for cash management or travel, which will create additional fees.
We've already started with our new pricing strategy by launching a new account model for Commerzbank customers in October 2020. This initiative has been very successful, and we've observed higher earnings with these new customers. The next step towards our new pricing strategy will be the launch of a new account model for Comdirect customers within the first quarter. Without doubt, such changes in pricing models, as well as changes in the sales model, will definitely create churn. With our fourth lever, we will actively address the churn risk. By doing this, we aim to keep as many customers' assets and revenues as possible. Regarding our modified sales model, we've run comprehensive analysis to calculate churn. Main drivers for churn, but also its mitigation, are branch proximity, branch use, advisory needs, and missing digital skills.
Let me point out that the advisory points play a crucial role for churn mitigation. Our staff at the advisory points will aim to provide personal help and support for many customers unused to digital self-service. Having said that, it remains to be seen whether we will still need 450 advisory points beyond 2022. Regarding the changes in the pricing model, our mitigation approach builds on the offering of attractive product alternatives to affected customers. All in all, we expect a revenue churn of less than €300 million. This is also reflected in the revenue bridge from 2020 to 2024. Our starting point in revenues for PSBC in Germany is €3.8 billion. The churn and the ongoing drag from negative rates rake on revenues with almost €600 million. With our comprehensive and detailed revenue measures, especially with premium clients, I believe we can offset this burden.
On NCI, we clearly focus on securities and will benefit from Comdirect's brokerage expertise. We expect the increasing client demand to continue. 2020 has seen a lot of first-time investors into securities. This changing behavior of customers from deposits to securities is encouraging. It provides customers with better return opportunities and is also good for our business. The other key driver for NCI is the payment-related business around account models, which will benefit from our pricing initiatives, as already mentioned. On NII, we've focused our initiatives on three products. In mortgages, we continue our successful development, especially with premium clients. Regarding individual loans, we focus on premium small business customers, and consumer loans will benefit from increased third-party sale. On a net basis, we expect only a slight growth in revenues until 2024. But to be very transparent, the targeted level of revenues requires more RWAs than today.
They stem from additional loan volumes to offset the ongoing NII drag from deposits. Although these numbers dilute the revenue profile, it's important to note that all additional loans in the plan earn their cost of capital and benefit from lower expenses. This leads me to the overview of targets we have set in PSBC Germany for 2024. As I've just said, we plan for only slightly increased revenues of €3.9 billion. This comes with an additional €7 billion RWAs from capital-accretive business. Our cost base will be reduced by more than 20% from €3.2 billion down to €2.4 billion. This is reflected in the reduction of 3,500 FTEs down to 7,300 FTEs. With all the measures in place, our cost-income ratio will improve substantially from 85% down to 62%.
Despite the additional RWAs in the division, the return on quarter-year one capital will improve from 8% to 31%. Ladies and gentlemen, this is a transformational program for our business with private and small business customers in Germany. We are building a completely different bank. It will be highly digital, very efficient, and still customer-driven to the maximum extent possible. The management team in the division is totally committed to building this new bank and to starting on the execution of the plans. To be honest, this is very much needed because we need to be focused and fast in taking decisions and implementing changes. But we are not starting from scratch. We've already taken decisions and reduced our branch network. We have fully integrated Comdirect and can seamlessly build on all capabilities.
And maybe most important, we are today and will remain a customer-driven bank with superior advisory services for its clients. With that in mind, our transformation program will show progress every single year. This year, we will expand our remote advisory center platform and permanently close another 200 branches. We will also establish our fast lane for the support of our premium clients. In 2022 and 2023, we will have reached our target with regards to branch network and remote advisory centers. We will have made major progress in our digital offerings and will have finalized the Comdirect integration. Finally, in 2024, we will have established the full target setup. Assets under control should be above €390 billion, and 73% of our clients will be active digital banking users. Ladies and gentlemen, in PSBC Germany, we are undergoing a radical change.
I am committed to this transformation and have every intention of making it a success. Thank you very much. In 1989, Jörg Hessenmüller started his work for the group as an apprentice at Dresdner Bank. In 2012, he became CFO of Commerzbank's subsidiary mBank, one of the leading banks in Poland. Four years later, in 2016, he returned to Frankfurt to take up the position as Divisional Board Member for Development and Strategy and Digital Transformation. In January 2019, Mr. Hessenmüller was appointed a member of the Board of Managing Directors of Commerzbank as Chief Operating Officer. He leads the departments for operations, organization and security, digital transformation, and also parts of the delivery organization. In addition to his position as COO, he is Deputy Chair of the Supervisory Board of mBank. Good afternoon. I am delighted to be here.
My colleagues have just given you a brief overview of our strategic priorities within our core business unit. What I want to do now is lay out my role as COO in facilitating this transformation. Clearly, I need to deliver on the technical needs in order to lead the bank into its new phase. Equally, I need to ensure that execution and delivery of our strategic priorities, namely efficiencies. Since 2016, we have placed technology and, in particular, digitization at the heart of our business model. As a result, we have focused investments into our IT infrastructure towards building a modern banking platform. With our campus approach, we have successfully introduced a new organizational model where we assemble tech, product, and channel expertise, and where we develop products for our customers, explore technology ideas, streamline, and digitalize the core processes of the bank.
We have also successfully established a state-of-the-art platform for compliance, finance, and risk management. This gives us scope for further investments to better serve our clients. By and large, we have made significant progress, but it is not fully visible yet. First of all, the structures and processes in our head office, as well as in operations, are not yet comprehensively optimized. Despite some considerable IT achievements, our overall IT infrastructure is not yet where we want it to be. Over the past few years, we have all seen the accelerated progress of IT in the banking world. Take, for example, the emergence of online challenger banks. Our business model no longer defines which technology we use. It's the other way around. Technology is determining our business model. Consequently, technology know-how is critical for us. In some areas, we are still too dependent on external support.
We are working hard to build our respective know-how internally so that we can reduce costs and expenses. As a result of this, two strategic priorities emerge for the COO area: ensuring efficiency and building a new bank. With regard to efficiency, technology plays a major role in reaching the bank's efficiency and cost reduction targets. We have committed to deliver €700 million in cost reduction by the end of 2024. The three main levers to reach this target are: first, we are downsizing and adapting functions in the head office, such as finance, risk management, communication, and human resources. Second, we are consolidating and streamlining processes in operations. Third, we will increase efficiency in the delivery organization, not least due to simplifying our IT systems. What do we mean by building a new bank? The mantra of customer centricity is the reality.
This will require further enhancements in our tech stack and our culture. We need to reduce complexity, modernize our IT platform and our services, as well as increase speed in innovation and product delivery. We need a higher degree of flexibility in our product suite and services so that they can be adapted to the ever-changing customer requirements. While executing on all these objectives, we need to always focus first and foremost on the needs and desires of our customers. This will require a significant IT investment. We estimate to spend a total of €1.7 billion to create the state-of-the-art IT platform for Commerzbank that we need. I will explain the details of this in a moment. Above all, providing operational stability at all times is a fundamental principle in our transformation process. In 2020, we achieved our operational stability goal, which we closely measured in IT incidents.
During the pandemic, we have proven that our operations are resilient against external shocks. We will continue to strictly monitor any deviation, and we have a clear plan on how to reach our goals and milestones. Let me start by focusing on efficiency. On the slide, you can see at a glance in which areas we want to achieve the cost reductions and how staff reductions will be distributed. In operations and corporate functions, we will save roughly €700 million through efficiency gains. This represents half of the overall cost savings for the group of €1.4 billion. Almost 60% of this reduction will be realized in the delivery organization. Manfred told you about an overall headcount reduction of approximately 10,000 full-time employees. We will contribute to the reduction with nearly a third or 3,200. The digital transformation has been impacting our activities already for years.
The pandemic that we are now living through is accelerating these changes more radically than we could have ever imagined. We expect to reduce occupancy expenses by more than €100 million by reducing staff numbers and cutting the number of locations we operate in. Moreover, we will enhance the use of our workspace as we adapt to new remote working approaches. The pandemic has greatly accelerated the trend towards working from home. It has become the new normal. Flexible and adaptable working will be an integral part of Commerzbank's everyday life, even after the pandemic. We were astonished to see how focused and efficient this way of working can be. Additionally, we will achieve cost reduction through a variety of optimization measures in operations and central functions.
We will do this by streamlining organizational structure to reduce complexity and flatten the hierarchy by transferring admin processes from sales to operations, by further digitizing and automating processes. For example, we will further automate risk management processes through the use of artificial intelligence. Accordingly, many manual process steps will be eliminated. As a result, we have identified synergistic benefits of approximately €200 million in direct costs. Our headcount will be reduced by 2,900 employees net in operations and corporate functions. Our delivery organization will contribute a further €400 million to the overall cost saving target. This will require us achieving our objectives to transform our IT program and promoting our technology enablers. We will reduce the number of employees here by 300. The gross number is far higher as the reduction includes a release of roughly 1,000 employees in high-cost locations.
This will be somewhat offset by hiring 700 employees in low-cost nearshoring locations, solely focusing on tech knowledge. A very important lever is internalization of our processes and intelligence. In light of our IT-driven business model, we want to be less dependent on external staff and to further internalize our know-how. The external resources will be reduced by 60%, which equals 1,300 FTEs. Let me now move to the investment required to achieve our aims. Over the last few years, we have set the course for building a new bank. We now want to build on this position. In order to be flexible and to meet new customers' requirements quickly, we have been rebuilding the bank's technology foundation. As I've already said, to complete the Commerzbank digital transformation will require approximately €1.7 billion of investment. We have already made a lot of regulatory investments over the past four years.
Now we need to focus investment on the necessary steps so that we can reach the state-of-the-art IT architecture that our customers demand. The largest share will be invested in the digitization of our businesses with private and business clients. Equally, we will finalize the technical integration of Comdirect, which will benefit us by integrating their expertise. We will also invest a large sum in the digitization of the corporate banking business. The strict execution of these investments is key for building the new bank, and I am committed to our plans. We will invest in these strategic projects in order to cement the technology foundations of Commerzbank. It's not that we are about to flick the switch on here. We set the course last year, and we have already started the initiatives in our delivery organization. We are continuing along these paths.
The main focus of my COO division will be to enable our journey, modularize our IT, and automate processes, thereby focusing on technologies such as cloud computing, continuous deployment, and extension of APIs. Overall, the architectural transformation forms the base for our program. It comprises major architectural steps driving cost efficiency, flexibility, stability, and customer experience. We will modernize our application infrastructure. In addition, we will further standardize and modernize our software, strengthening security and enabling state-of-the-art features for our applications. We will industrialize our software development process. The so-called continuous integration and continuous deployment, in short, CI/CD, automates the process wherever possible from development to testing to sales. In such a route, it can take less than 15 minutes between the change of a source code and its commissioning. A good example for fast time-to-market delivery is our virtual debit card.
Last year, we were one of the first German banks to launch within eight weeks our virtual debit card. Nearly 350,000 virtual cards have been downloaded since then. The key to success has been and will be even more in the future to create a superior customer experience: simple, automated, and available in seconds. With CI/CD, all development steps from request to production are fully automated. By 2024, about 95% of our applications will use the CI/CD pipeline. This will enable our teams to bring new features to our customers, get instant feedback, and continuously improve our digital offerings. Innovation will play an important role in our future bank. We have prioritized six main technologies as the building blocks for our new bank. First and foremost, it's about, as mentioned, automating processes. The use of cloud technology plays a decisive role.
We announced a few weeks ago that we will build on a cooperation with Microsoft, but as you know, we also partner to the same level with Google Cloud. Let me briefly explain the importance of two key technologies for our businesses. First, open banking, as we believe in open platforms. By offering standardized APIs, we aim to become part of the business model of our clients and selected partners. We will provide services that seamlessly integrate into their systems. As a basis for our open banking journey, we have built 150 APIs for central services so far, and we are aiming for more than 300 interfaces by 2024. In addition, we have developed far more internal interfaces that have helped optimize processes within the bank. Overall, this effort will enable us to reuse functionality much more effectively and quickly. Second, big data.
The evaluation and targeted use of data will become one of the decisive competitive factors in the coming years. In respect of big data, which internally we call BDAA, a lot has happened at Commerzbank, especially with regard to risk management. We use BDAA where we want to analyze the various industries, networks, and dependencies in real time and create transparency with the help of automatic risk signals. Especially in a time of complex risks and unpredictable effects for supply chains, such as those we have seen in the COVID crisis, BDAA is of great importance for the predictive analysis. Already, we have largely automated the transaction data processing pipeline right up to the dashboards. The relentless focus on execution remains my top priority over the coming years. We have a clear roadmap ahead. This year, we will focus on driving our efficiency measures and reducing FTE numbers.
Additionally, we will start to execute our organizational target structure and scaling our nearshoring locations. In 2022 and 2023, we will achieve milestones by finalizing the Comdirect integration and by realizing additional sourcing and nearshoring projects. By 2024, we aim to have achieved our goals and KPIs. I am convinced our roadmap will keep us on track towards our targets and beyond. As Commerzbank, we have already gone through quite some change, and we will continue to evolve. To be successful on a long-term basis, we want to create a real customer experience by always being one step ahead of our customers' needs, by providing simple, fast, and secure solutions, and by delivering real value to our customers. Thank you very much. Having obtained a doctorate in physics in 2001, Dr. Markus Krumig started his career at McKinsey, followed by several management positions at Deutsche Postbank.
In 2009, he began his work at Commerzbank as divisional board member responsible for market risk, followed by heading the credit risk function from 2012 to 2015. Since January 2016, Dr. Krumig has been Chief Risk Officer at Commerzbank. He currently heads six key departments, which include big data and advanced analytics, credit risk management, cyber risk and information security, credit risk control, and compliance. In addition, he is Deputy Chairman of the supervisory board of Commerzbank subsidiaries Commerzreal and Commerzreal Investment Gesellschaft, as well as member of the supervisory board of mBank. Ladies and gentlemen, without doubt, these are challenging times, and not only for risk managers. The list of current risk factors is extensive: climate crisis, trade conflicts, low interest rates, digitization, and of course, COVID. Each individual risk is already complex, volatile, and capable to initiate severe problems.
It has become ever more difficult to identify individual causes and accurately predict the consequences of potential crises. This holds even more true for the pandemic. We still don't know how far we are through the most severe crisis of this century so far. As yet, we don't know how efficient the vaccination process will be, how the mutation of the virus will develop, in what time frame, and in what way. Above all, as yet, we don't know the full extent of the damage to the global and local economies and whether COVID will cause even more harm to the economy. On top of this, while being in survival mode through the pandemic, companies are facing a huge transformation towards digitization and ESG at the same time. We are at the start of a decade of decisive importance.
It's not only about the world with COVID, but also about the world after COVID. As the Chief Risk Officer of Commerzbank, it's my duty to safeguard the bank's capital and liquidity and to ensure that the bank is resilient at all times. I firmly believe Commerzbank has two main components for its resilience. First, we have a very well-underwritten loan book, which focuses on the core economies. We are in close contact with our customers and understand their needs and the risks they are facing. We know precisely how to help them. Second, with our Strategy 2024, we have developed a plan with a significant distance of the capital ratio to the MDA. This allows us, in case of a deviation from the plan due to, for example, COVID worsening, to buffer for uncertain events that may arise in the future.
Therefore, being the COO of a German bank and of Commerzbank is not the worst job for a COO these days. Germany has the strongest economy in the Eurozone. The unemployment rate and debt ratio are well below the EU average. Our house prices are stable, and our GDP has shown high resilience towards the COVID crisis, not least due to the comprehensive aid programs of the government provided for the economy. Our risk assumptions are in line with the ECB analysis and expect GDP to rise by 3%, somewhat more conservative than our own economists. We are benefiting from the fact that our clients operate in Germany and other attractive economies in the heart of Europe. 75% of our loan book is allocated here.
Over the last few years, we have rigorously reduced non-core industries such as commercial real estate, shipping, and various emerging markets business, which are struggling right now. Instead, we have focused on the German Mittelstand as our core business. Our low risk appetite is reflected in our internal ratings. 85% of our exposure is taken with investment-grade clients. But also, other near-term parameters show resilience. Our NPE ratio of 1.0% is low compared to other European banks. Volume of moratoria was low throughout the crisis. As of June 2020, the volume for corporate and private clients stood at 1.6% and is now nearly gone. Migrations and overdrafts indicate robustness. This crisis has clearly proven the advantage and importance of our long-standing client relationships. The so-called house bank principle is based on a trusting and open dialogue. Dialogue, for me, has been key to working with our clients through the pandemic.
As an example, in advance of Germany's first lockdown in March, our credit officers and risk specialists examined our client portfolio for the potential impact due to the pandemic. It started with a simple question: which clients are dependent on production in or export from Wuhan in China? Information you do not have in any of your databases. So we approached more than 1,000 customers for a risk assessment. Subsequently, we have been able to determine the pandemic's direct and indirect impact on production, business, and supply chain matters. Our expertise and our long-established bank-client relationships have allowed us to act quickly and professionally in supporting our clients in this difficult and dynamically shifting market environment. We help our clients identify the right tools to assist them, and we issue every loan that we can prudently approve.
As such, we can manage our risk position and support our customers during this unprecedented crisis. Now, let's have a look at the 2020 risk result and how COVID is showing itself in our books. We booked loan loss provisions of €1.75 billion, which we break down in three buckets. First, our base risk result of almost €790 million covers all losses, which would probably have occurred without the crisis anyway. Second, we have booked more than €450 million for loan losses, where we could clearly identify the COVID impact. Third, €505 million comprises our top-level adjustments, TLA. Why do we book a TLA? Imagine you are sailing against a strong wind force of Beaufort scale of 7, and you know there is a heavy storm approaching. What do you do? You can shorten the main sail and reduce the surface.
For the time being, your boat seems safer. You are sailing with a small sail and 7 Beaufort. But the storm is still out there. Most of our customers, which do not belong to the immediate effective sectors, did the same, from retail customers to corporates. We see customers bunkering liquidity by using programs or, in most cases, spending less. Investments are on hold. These cushions sometimes even support the rating. Net debt to EBITDA, for example, looks better. But the storm is still coming. Only if the storm is gone, you will see the real damage, for example, rating migration with a time delay. That is why we have built the TLAs in 2020. As of today, we expect that the current TLA covers the effects of the second lockdown. Overall, we have booked €960 million in order to cover expected impacts of COVID.
Without doubt, a significantly higher probability of default can be assumed for industries and sectors such as tourism, hospitality, and some retail, which we know will be affected. We currently assume that we will see at least around four times as many insolvencies in 2021 as in the previous year. On the one hand, this is due to the fairly low number in 2020. On the other hand, the disruption and speed of change in recent months have been so radical that some business models are now fundamentally challenged. Allow me the comment as a risk manager: if the existing or even tighter lockdown measures are extended beyond March, we cannot rule out further TLAs. Depending on the industry and company, there will be very different development paths. Aviation and tourism will certainly need a longer time to reach pre-crisis level.
However, areas such as technology, health, online trade, and digital services will move forward with a lot of tailwind. For those industries hit hard by the crisis, it will take a long time, if at all, to reach pre-crisis levels. The TLA that we have built is almost equally split among the core corporate portfolios: Mittelstand, international clients, and small business customers. In our private portfolio, we don't expect a lot of COVID-related defaults because the unemployment rate remains low, thanks to the allowances for part-time working. On this slide, you can see the development of the different stages over the course of the year. There weren't significant movements between stages 1 and 2 yet. However, our rationale for booking TLAs in 2020 is that we will see the impact of altered parameters within the models with some time delay.
We booked the top-level adjustments for the performing portfolio, mainly stage 2, in order to assure sufficient coverage of potential COVID effects. Pandemic-related downgrades, including stage migrations in 2021, are also anticipated. From 2022 onwards, we expect a normalization of the risk environment. As you can see, our customers have come through the crisis quite well so far. Most deferrals we allowed for in 2020 ended according to schedule. More than 97% of our customers have so far resumed their payments. This figure surprised me positively, if you allow me that comment. We will closely monitor those loans that are or have been under moratoria. Loans under moratorium represent currently only 0.2% of our group loan portfolio. With our healthy risk profile and comfortable capital ratio, we see ourselves well equipped to manage this current COVID situation.
Overall, the non-performing loan portfolio is actively managed within what we call our intensive care unit. The non-performing exposure is stable around 1% of our overall loan portfolio. In addition, the overall rating score of the entire loan book is stable due to the cautious measures clients take. After years of relatively benign economic conditions, this historical low-risk result's risk cost went up because of the COVID pandemic. Despite the impact of COVID, we expect loan loss provisions to go down below €1.2 billion. From 2022 onwards, we are positive that the risk result will reach more normalized levels. LLP will arrive at pre-crisis levels, slightly below the expected loss again by 2024 at the latest. It doesn't need me to tell you that I don't have a crystal ball into the future.
Looking at our strategy, for me as a CIO, it is foremost important that you continue to have a substantial distance to the MDA, which gives us comfort. I started my speech by saying it's not about the world with COVID, but also about the world after COVID. Germany and Europe are in a decade of decisive importance, which requires significant investments and innovations. Our economic strength is largely based on the efficiency of the German industry, the Mittelstand, and above all, its ability to innovate. Companies not only have to cope with the short-term consequences of the pandemic crisis, but also have to invest to fundamentally transform their business models. Commerzbank can play a crucial role here, especially with regard to those companies that have a viable business model, but who are unable to finance the payback of state aid and their transformation at the same time.
We need to develop solutions to create opportunities for investments. For example, joint ventures, in which companies contribute to the R&D capacities and a potential fund provides the money necessary for financing, or a participation in new concepts such as public-private partnerships. Commerzbank, including the risk department, is committed to be at the side of our clients in these times. When uncertainty rules, as a Chief Risk Officer for Commerzbank, I firmly believe we can help our clients to master the challenges, which ultimately will also create value for us. Thank you. Dr. Bettina Orlopp studied business administration and holds a PhD in finance from the University of Regensburg. She began her career as a consultant with McKinsey in 1995, where she was elected as a partner in 2002. Her work at Commerzbank began in 2014 as Head of Strategy.
From 2016 to 2020, she was responsible for legal, compliance, and human resources as an executive board member and was appointed member of the board of managing directors in 2017. In March 2020, she was appointed Chief Financial Officer at Commerzbank. She is responsible for finance, tax, investor relations, and treasury. In addition, Dr. Orlopp is a member of the supervisory board of Commerzbank's subsidiary mBank. Good afternoon, ladies and gentlemen. Let me now provide you with the financial framework of our strategy. The targets for 2024 are based on prudent assumptions. We have planned for an unchanged euro interest rate environment. With this assumption, we are somewhat more conservative than the market, as futures show about 35 basis points higher levels for 2024. We have also not assumed any competitive easing in the German banking market.
We clearly expect an accelerated adoption of digital banking due to the pandemic and have included this in the plan. It is also important to note that we have based our plan on an economic recovery for 2021. Our economists expect a GDP growth of 4.5%. Overall, I would say our target of 7% return on tangible equity is realistic and not impacted by overly optimistic assumptions. It has not factored in the potential for capital return of up to €3 billion, which is, of course, subject to receiving the prior permission of the ECB. Cost savings are the main driver towards this target, and disciplined RWA management keeps capital consumption under control. Revenues follow the clear prioritization of profitability over growth and stem from our core clients and private and small business clients and corporate clients.
By and large, this is a robust approach with cost savings of net €1.4 billion at the center. My colleagues have already elaborated on €1.6 billion cost savings. Please note that the savings from head office and operations will be allocated to the segments and are reflected in their numbers. All savings are net of cost inflation. In other words, our assumed average cost inflation of 1.6% is already reflected in the numbers. As mBank will pursue its successful growth path, we have assigned €200 million additional costs to support its growth strategy. As I will go into the staff cost reduction in a moment, let me spend a few minutes on the drivers for the reduction of admin expenses. First, a major driver stems from the optimization of our IT platform and the reduction of external IT staff.
Second, we benefit from reduced occupancy costs due to branch closures and streamlining of international locations. Third, we gain synergies from the comdirect integration and increased efficiency in head office and operations. On top of these, we expect some relief on compulsory contributions stemming from the European Bank levy in 2024. Our cost reduction path until 2024 is characterized by lower costs every year. By 2022, more than one third of the savings will be realized. All the cost figures in the plan already include the necessary IT investments of $1.7 billion. The $1.7 billion reflects our change-to-the-bank projects until 2024. As this is a cash-spent number, not all of it directly shows up in P&L. Our average capitalization ratio stands at roughly 50%. One of the key cornerstones of our strategy is to become much more digital and efficient.
This is what larger parts of our IT investments are assigned to. As a result of the more digital and efficient setup, we will have fewer jobs in the bank. This leads to lower staff costs. In numbers, we talk about a reduction of 10,000 FTEs. This is a lot and represents 30% of the workforce, excluding Mbank. It makes very clear how immense the transformation is. The baseline for the reduction of 10,000 FTEs is the actual number of FTEs at the end of 2020. Please note that we have planned for more than 80% of execution by the end of 2023. This ensures the full cost-saving effect for 2024. On the other hand, we will hire 2,300 FTEs in nearshoring locations and to replace expensive external support.
On a net basis and including the slight increase in Mbank, we will reduce internal FTEs by 7,500 in the group and reduce externals by 1,300. Now let's look at the respective restructuring charges for our transformation program. In 2021, we expect to book the remainder of the restructuring charges, which in total amount to €1.8 billion. The vast majority of the charges are necessary to finance the FTE reduction. The average cost per redundancy has been calculated at around €160,000. This number reflects the increasing age and long tenures of affected staff, which drive the severance costs. The remaining €200 million restructuring charges reflect, in particular, our branch closures and the streamlining of the international network. To summarize on cost and efficiency, we have looked into all areas of the bank to make sure that we identify as many cost savings as possible within the new setup.
I believe we have a bold but feasible plan. But we won't stop here. We will continuously look for further cost improvements and add them to the plan. Furthermore, we have set up a disciplined control process to make sure that we meet the numbers each and every year. Let me share with you two group-wide instruments that are under my control in the CFO area. The first instrument is called SAFE and stands for the Quantitative Steering of All Efficiency Initiatives. On a monthly basis, we will track achievements in terms of savings and also evaluate the pipeline going forward in terms of reliability of the measures. The second instrument is our quarterly performance dialogue. With attendance of the management board, the performance and outlook for every business line will be evaluated.
Based on the discussion of revenues and costs, concrete measures will be decided if a business is not completely on track. On the revenue side, we have planned for only moderate growth. Negative effects from rates and churn will be balanced out by additional business with attractive core clients and profitable products. The overall increase in revenue stems completely from Mbank's growth path. On NII, we clearly expect a further drag from the negative rates environment. It's visible, especially in PSBC, with a $300 million impact until 2024. Again, we haven't factored in any positive impact from our strong gearing towards rising rates. Churn is a second drag on NII and also on NCI. I'm convinced that we can limit the impact due to our respective measures in PSBC and corporate clients.
With a targeted loan growth in PSBC and strict margin management, we will almost compensate the NII drag. Margin management includes all RWA inefficient business, but also further measures to charge deposits. The overall NII increase of $400 million is offset by a $400 million decrease in the fair value result within other revenues. This reflects the structure of our balance sheet management and the respective hedges. On NCI, we plan for an increase of $500 million. Profitable growth with core clients in PSBC and CC is at the top of the agenda. Regarding securities, I would like to point out that we have not extrapolated the strong securities business of 2020 to its full extent. Regarding the risk result, Markus has already elaborated on our view going forward. We still expect an elevated level for 2021 of 30 to 45 basis points.
From 2022 onwards, we expect normalization back to the level we had until 2019. This is reflected in our plan figure of around €700 million for the years 2022 to 2024. With our plan for cost, revenues, and risk result, the turnaround program is visible in the targets for 2024. We are aiming for an operating result of €2.7 billion. With cost savings as main driver, we will improve our cost-income ratio by 20 percentage points to 61% in 2024. As you have seen in our cost reduction path, this plan is not back-end loaded. Every year will show significantly lower costs. Revenues are expected to be slightly lower in 2021, but to pick up thereafter. With the expected normalized risk result from 2022 onwards, our operating result should exceed the €1 billion mark again.
This significant improvement in cost-income ratio positions us well in the banking landscape, which is reflected in our target of 7% return on tangible equity. The target return is based on overall stable RWAs, but a significantly different allocation. While lower market risk covers regulatory inflation, lower RWAs and corporate clients basically fund capital-efficient growth in PSBC. As CFO, I would like to point out that this approach clearly follows our principle to prioritize profitability over growth. We will make sure that we tackle and reduce all businesses with unsatisfactory RWA efficiency. In corporate clients, we will reinvest $7 billion of RWA in higher-margin business, especially with smaller SMEs in Germany. As a result, we still account for a $12 billion reduction of our credit RWA in corporate clients. These freed-up RWAs will be reinvested in PSBC Germany and Mbank.
In PSBC Germany, the focus is on capital-efficient growth in mortgages, consumer finance, and loans to small business customers. RWAs and others in consolidation benefit from regulatory treatment. To remind you, around half of the current $33 billion credit RWAs result from long-term legacy positions. The remainder is mainly due to the liquidity portfolio and RWA for DTA. Overall, we expect risk-weighted assets of $183 billion by 2024. The overall flattish RWAs are also reflected in the resulting CET1 ratio, which is far above MDA. We start with a CET1 ratio of 13.2% in 2020 and a buffer of 370 basis points above MDA, which is currently at 9.5%. This clearly gives us the capacity to execute our transformation with existing capital resources. As RWAs in the plan largely level out, retained earnings are the key driver for a 14.6% CET1 ratio in 2024.
This ratio of 14.6% does not include any capital distribution, but it's clear that it reflects a significant amount of excess capital on top of a 200 to 250 basis points buffer above MDA. We are convinced that based on an appropriate requirement of maximum 9.5%, these 200 to 250 basis points are the right buffer for our substantially simplified business model. So let me close with our thoughts on capital distribution. Without any capital distribution, our strategy delivers a return of 7% at a CET1 ratio of 14.6%. As we are convinced that we should run a buffer of not more than 200 to 250 basis points above MDA, we are considering respective capital returns to our shareholders. The instruments can be dividends, but also share buybacks, which are subject to receiving the prior permission of the ECB.
We know that the latter one is an attractive instrument given the valuation we currently face. We have run the math to provide you with a sense for the capital that could be eligible for capital distribution if our plan works out. The capital return of €2 billion would still translate into a CET1 ratio of 13.5% and a return on tangible equity of 7.3%. The distribution of €3 billion lifts the return to 7.8% and still reflects a CET1 ratio of 12.5%, which is even more than the 250 basis points buffer to our current MDA. The potential for capital return becomes visible by 2023. Any return, obviously, still depends on many future factors. Furthermore, it requires concrete resolutions of the relevant bodies. But our aim is clear. We want to provide attractive returns to our shareholders, and this includes the distribution of capital. Thank you.
Ladies and gentlemen, as you have heard, this is a truly transformational plan with high-value creation potential. Now it is all about execution. I will personally head up the transformation management. It is my clear task as a CEO to make sure that the team delivers. We have already set up the complete governance structure for execution. The new department for strategy, transformation, and sustainability as key execution driver is directly under my supervision. Based on this structure, we will drive and track the execution of the program with high frequency. This is an important prerequisite to create a new performance culture that rewards accomplished targets and milestones. The most important task in the beginning is to ensure the efficient implementation of the FTE reduction program. Not an easy task given the size of the job cuts.
We are optimistic to have fast and fair negotiations with the Works Council. So far, collaboration with the employee representatives on the supervisory board has been excellent. In principle, they all support our program, and we have already signed the first agreement with the Group Works Council. The agreement defines fundamental principles for shaping the transformation process in Germany. The objective is to provide clarity and transparency as early as possible about positions affected, timeframes, and perspectives. Our target is to conclude the necessary framework arrangements with the Works Council already for the AGM on the 5th of May. After that, we will negotiate the detailed agreements with the Works Council and can then start the implementation of the redundancy program. Clearly, it is important for me to treat the affected staff fairly at all times. This includes the offering of voluntary redundancy programs.
But it is also clear that we have to think into the direction of a qualification company. This is a legal entity used to bridge between Commerzbank's redundancy program and unemployment. Affected staff in such an entity will learn skills and be helped to find other jobs. At the end of the day, my hope is that we will have a lean and committed team in place who are focused on building the future of Commerzbank. The execution of our transformation has many other milestones to be achieved, and there are also clear performance criteria that will be measured. We have created a dashboard for performance management that starts with P&L and capital. On top of this, we will closely monitor the achievement of every strategic milestone and the development of most relevant KPIs.
They all carry an ambitious target for 2024, be it FTE reduction, asset growth in PSBC, or RWA efficiency in corporate clients. My colleagues have just presented them in their presentations and are all committed to these KPIs. We have also defined specific targets for each KPI for this year. To pick a few, in PSBC, we will reduce the numbers of branches by a further 200 and increase the loan and securities volume by $20 billion. In corporate clients, we have already exited three international locations. Despite further potential rating migrations, we will reduce the share of low-yielding RWAs from 34% to 32%. In operations and head office, we will have already 50% of decentralized applications on cloud technology. This is an increase of 18 percentage points. My standard for performance management is clear. There are no excuses, and promises are there to be kept.
Ladies and gentlemen, let me conclude what you have heard in the past two hours. First, we have developed a clear, ambitious strategy, and all of us are fully committed to the strategy and the related targets. Second, we are completely focused on customers, digitalization, sustainability, and profitability. Third, we will execute the strategy and deliver every single year. We all want to make Commerzbank strong, efficient, and sustainably profitable again. By implementing our strategy, we believe Commerzbank can become the digital advisory bank for Germany. Implementing this program is my mission. That's why I am here. Please be assured, we will not rest until we have reached our goal. Thank you very much. Now, let's move on with our Q&A session here in Frankfurt, live on the 49th floor of our Commerzbank Tower.
Before we actually start, and we look very much forward to your questions, all the seven of us on stage, I would like to explain a few technicalities with regards to how to place a question. First, for those participating in the webcast, you have a little window at the very bottom of your screen in which you can text a question. If you add this question with your name and the institution you're asking for, you will be put on the list, and then we will pick you up later on in the session. Second, for those participating via the Teams session, you all know that there is this virtual hand that you can raise. If you want to place a question, raise your virtual hand, and you will be put up on the list.
Number three, for those participating in the audio line, in the conference call line, press nine-star to indicate that you want to ask a question. So with those three ways, I think we can fill the one hour ahead of us very well. It is our goal, of course, to give as many as possible from you the chance to ask a question. This is why I would really like to ask you to limit the number of questions for each of you to two, not more than two questions, please, to give the others the chance also to ask. With that said, I would say we just jump right in, and I look into my screen whether there is the first question there already. Yes, it comes via Teams, and it is Isabel Dobrevá from Morgan Stanley. Isabel, the floor is yours.
Go ahead with your question, please. You're on mute. Have you unmuted? Can you hear me okay now? Yes, we can hear you now. Okay, great. Thank you very much for the presentations. My first question is on revenues, and specifically the revenue assumptions within the retail division. If I look at the NII guidance and the fee guidance there, it looks like there is a meaningful step up in the pace of revenue growth. Could you give us some more, I guess, tangible examples about what you aim to do to increase the pricing in payments? Also, what are the volume assumptions you have underlining that NII growth, specifically by product? I think in the presentation, you talk about cross-selling more consumer lending through third-party channels. That's my first question on revenues.
My second question is on the roll-up of the CIB and the corporate restructuring. I'm interested to know how quickly you plan to roll off those RWAs, specifically within the years of the plan. Thank you. Thank you. I think Sabine will start, and then Michael on the RWAs. Sure. I take the first question related to the revenue growth in my segment. We are planning both for the NCI side. I'm planning a growth in the securities business, and that will benefit from the comdirect expertise in brokerage. If we bring it to all our 11 million clients, there will be an effect, and the scaling model of the brokerage model of comdirect will create additional fees. Absolutely right, we are planning to increase prices, and these are related to our payment business.
We have last year already started to bring a new current account model into the market, and we see slightly increasing revenues from that, and we are going to plan it also for the comdirect in the first quarter of this year. Looking to the NII growth path, you can see that we plan our growth in the consumer finance business by bringing more third-party sales in it. We have an attractive product at the moment, but we need more hands on the business. The third-party sales is the one side and also the improvement on the digital sales side. Then the lending part, we are planning growing part in mortgage business and also in individual loans for the premium client segment. On the RWA question, we will, as we said, decrease RWAs substantially in the corporate client segment.
Basically, we'll decrease RWA by roughly, I would say, $50 million, mitigating also regulatory model effects that we see during the course of 2024. We don't put a timeframe on years onto the RWA reduction because it certainly depends also on the international franchise of closing locations, because that's a big part of it, reducing RWAs and exiting the clients without connectivity and sector. Above this set, we basically will decrease RWAs substantially to 24, mitigating also the regulatory effects. Thank you. Okay, thank you. Thank you, Isabel. The next question comes also via Teams, and it is from Johannes Thormann from HSBC. Johannes, floor is yours. Up to you. You're on mute. You're still mute. We can't hear you. Sorry, Johannes. Can I put you into the line again, into the queue, and then pick you up later because we actually can't hear you?
Okay. So we will move on with the next question that comes from, let me see in my screen, that comes actually from Roy Adams, please, shareholder from the United States. Roy, are you there? Can you unmute yourself, please? We can see you very well. Go ahead with your question. Thank you. Hi. Thank you for taking my questions. We are favorably impressed by the leadership skill and planning of Manfred Knof, Bettina Olapp, and Hans-Jörg Wetter, and we have confidence in the bank's new strategy. My two questions are as follows. One, how will Commerzbank decide which branches it will retain? Which parameters exactly are in your branch retention algorithm? Number two, what is Commerzbank's strategy for mitigating the direct and indirect litigation risks associated with MBank's Swiss franc mortgage portfolio? Chairs. Thank you very much, Roy.
I think Sabine will take the first question on the branches, and then Bettina on the litigation risks with regard to MBank. Okay, let's start with the branches. We have a lot of experience, and I know our branches, our locations very well. So we have our own analysts, and we put on external data on the table to create an overview for the potential for the future. For me, it's important to know where's the traffic in the future, where are the growing areas in Germany? Therefore, I think it's really necessary to put also the future data in it.
Therefore, we have no plan, but I have to put the answer a bit into the future because we have to negotiate this plan, first of all, with our workers' councils, and we will do that fast because it's necessary to make also for clients and employees clear what's the future workplace for them. On the Swiss franc reserves, as you have probably seen, we have booked now more than $300 million reserves for Swiss franc litigation, alone $229 million in 2020, and that basically reflects the incoming lawsuits we have already seen, but also our assumption on future lawsuits to come in. From today's perspective, we have fully provisioned what we see.
It's important to note that there will be end of March a Supreme Court decision, and that will be or will hopefully provide a lot of clarity on that, and then we will see whether we have booked too much, whether we are right to the point, or whether we need to book more. Today, we are fully provisioned. Thank you. The next question, believe it, is from Johannes Thormann from HSBC. Second try, Johannes. No. It doesn't work. Try the audio line then, Johannes. We can't hear you. We can't hear you. Try the audio line, please, because there's no way of hearing you. Having said that, I'm sorry for that, Johannes, but I would like to go on then with Ricardo Rovere from Modi Mediobanca. Ricardo, go ahead with your question, please. Can you hear me? Absolutely. Perfect. Thank you. Thanks.
I'm luckier than Johannes at the moment. Just a couple of questions, if I may. In the previous planning, Commerzbank 5.0, you had some revenue growth embedded in the plan, and you were somehow criticized for that. This plan, at least in Germany, embeds zero, technically zero revenue growth. The whole revenue is from Poland. Do you think it is literally impossible to assume modest revenue growth, one, maybe two percentage points? Do you think that your assumptions are conservative on that front? The second question, if I may, is on rates. You clearly stated that any movement in rates is excluded in this plan, and I have nothing against that. You say the 25 basis point risk cost in 2022 onward is a normalized one. 25 basis points, is that compatible with the current ultra-low level of rates, or is it a bit too high?
Because if I'm not mistaken, in 2019, when rates were as low as they are, maybe you didn't plug, you didn't charge 25 basis points or something like that. Thank you. Okay, thank you, Ricardo. I think I take the two questions. On your first question, indeed, we have been very conservative now on the revenue planning. So no margin easing in Germany, no rate increase. However, if you look deeper into the planning of corporate clients and private clients, you see different effects. You see negative effects stemming from the negative rate environment. You see negative effects because of churn, which we expect, and also because of the streamlining and RWA optimization initiatives, specifically at corporate clients. That we balance out, basically, and we completely balance it out in PSBC due to our positive measures Sabine just elaborated on.
Plus, we also managed to basically manage it out due to profitable growth in the Mittelstand business here in Germany. So there's a lot of ongoing things. Regarding loan loss provisions, yes, we say that on 2022 onwards, we believe that there will be normalized levels for loan loss provisions, and the 25 basis points are pretty much the level which we have seen in 2019. So it definitely fits to the rate environment we are currently assuming. Thank you. Yes. Thank you very much. Thank you. Thank you, Ricardo. The next one is over Teams again, and it comes from Kian Abuhussein from JP Morgan. Kian, go ahead with your question, please. Yes, hi. Thanks for taking my question. I have a question regarding page 57. Just wanted to have more details on your MBank €600 million contribution.
What are the assumptions that you've made on the revenue side, on the cost side, i.e., how do we get to the $600 million? Secondly, on page 28, you talk about the 10% CAGR growth, and I wanted to understand, first of all, what is a base for business client loans? In addition to that, how do I square that with the $20 billion that you discussed in terms of, I believe, credit growth? I think that was on slide. No, I can't find the right slide now, but I think you talked about $20 billion of growth. Yeah. I think Bettina will start with the question with regard to MBank and then Sabine. On MBank, indeed, you see a $600 million revenue increase on the one side and a $200 million cost increase on the other side.
That's basically very much in line with what we have seen with MBank also in the past. Please understand that MBank is an independent company also. They will also reveal their own plans beginning of March, they will then deliver much more details. I can only say that if you look on the historic growth on the customer base they have on the market development we expect in Poland, it's a very feasible and realistic plan. Okay, Kian. Coming to page number 28, from my part of the presentation, there I'm focusing on premium clients. That means it's only a part of my whole business. Overall, we are planning a growth from assets under control around €100 million until 2024, but this page only focuses on the premium client side. What does it mean?
There are the private banking and wealth management clients on the one hand side, on the other side are the small business clients. With them, we are planning a CAGR of 10% growing path with a loan business, also with a security business. It's only a part of it, so you can't compare the figures, the overall and the part of this on this slide, but that means that my growing path is really linked to the premium client segment because on the mass retail side, it's more flattish, and I think we can gain market share with the premium client, and therefore the asset path is growing and with attractive margin products on the loan side and also on the security side. Hope that helps. Thank you. The next question comes over Teams again, and it's from Stuart Graham from Autonomous.
Stuart, happy to hear you again. Stuart, we can't hear you. There you were. Can you hear me? Yes. Okay. I had two questions, please. The first is for Mr. Knopf. To drive this restructuring, you're going to need very good management information systems. How happy are you with the management information systems you've inherited at Commerzbank? The second question is, are there any accounting, regulatory, or rating agency blockages on dividends or buybacks in 2022? Say you're going to be solidly profitable, I agree, but I don't understand why shareholders need to wait for 2023 then on dividends or buybacks. Thank you. Yes, Stuart. Thank you for the question. I mean, at least what I found here on the management information system is good enough to drive execution.
This strategy is all about execution going forward, and therefore I'm really happy with what I find, and I can work with this well. The proof will come in the execution, and therefore I can work with what I have here, and that's where the focus is now. We need to deliver. And the second question, Bettina? Yeah, Stuart. I mean, you know we are always on the prudent side of the world. So I mean, in 2022, we expect an operating result of more than $1 billion already. So you could say, why not already planning dividends at that time? I think being realistic and given where we are currently with the corona pandemic, etc., we just wanted to be rather cautious on delivering such a message.
I think in 2023, we can be absolutely sure that if we execute the plan as presented today, we will see quite some potential with respect to capital return. 2022 is probably a little bit too early. But it's conservatism on your part. It's not some regulatory regulation. No, it's nothing regulatory, etc. It's basically just the fact that, I mean, 2021 will be very much still impacted by the corona pandemic, and we are just on the cautious side of where is the capital ratio. I mean, we will see a decline, as said before. We will see a decline in the capital ratio for 2021. It will definitely recover, but we are just prudent. Okay. Thank you. Thank you. And the next one is over the audio line, the nine-star line, and it comes from Benjamin Goy from Deutsche Bank. Benny, go ahead, please. Yes, hi.
Good afternoon. Two questions, please. First, on costs. As you said, it's a big cost-cutting program, and Mr. Knopf mentioned in his initial remarks the weak execution track record. I'm basically wondering about contingency plans in case the progress is stuck or doesn't move as fast as we would like to see it. I was wondering whether you would also consider Kündigungen or, I think, redundancies for operational reasons. That's the first question. The second is coming back to the Chief Risk Officer presentation and artificial intelligence, maybe, because a lot of neobanks are talking about their risk capabilities based on big data, but you should actually have probably one of the best databases that is available. Just wondering any lessons or any experience you can use to lower your cost of risk sustainably. Thank you. Okay, Benjamin.
I'm taking the first question, and then I will hand over to Marcus. With regard to the cost-cutting program, we are very confident that we can deliver in time because we have already our first agreement with the Works Council, and now we're planning for May 5th for the social plan negotiated, and then with further negotiations, we then really can go out to all our employees. So far, so good, and we are really in time, and we have excellent negotiations so far. I'm very confident and optimistic that we will be in plan. Can we exclude Betriebsbedingte Kündigungen? No, I cannot exclude that for today, but we hope it will not be the case, and we will work that this will not be happened, but I cannot exclude it. Marcus, now on your question. Okay. Yeah. Benjamin, thanks for the question.
I truly believe in the combination of human intelligence and artificial intelligence as a combination, and the combination is always very powerful when you're dealing with very complex data and a big amount of data, which we have nowadays, when you're looking for the needle in the haystack, and when you also have in the financial crime area changing schemas of fraud, for example. We can use the techniques on the one side to lead the people to investigate the right topic by reducing massively the amount of false positives or wrong alerts, for example, in the compliance area or in the fraud searches for fraud schemes, which is reducing on the one side because it's efficient risk cost, but also the cost of doing risk management because you have more targeted investigations then.
Secondly, I also believe it will play a major role in optimizing more and more credit decisions, and I believe that with our database and our customer base, we have the capability and the data to do it basically in the more or less the full retail and scheme up to small SMEs, and that's what we are shooting for, and that's why I believe we can, on the one side, reduce the cost of doing risk management and also tackle the risk cost this way. Thank you. Thank you, Ben. Now the next one is over Teams again. Next one's over Teams again, and it comes from Rohit Chandra Yahan from Bank of America. Rohit, please go ahead with your question. Hi. Thank you. Good afternoon. I had a couple as well, please. One on corporate clients and one more broadly on revenues.
The plan to reduce the low returning risk-weighted assets in corporate clients from 34% to 22% looks like it's mainly exits from those client relationships. I just wanted to clarify the $200 million revenue uplift in corporate clients that's targeted. Is that mainly from the $7 billion RWA reinvestment, or is there some additional benefit from improving profitability on existing risk-weighted assets? The second question was around revenues. Firstly, thank you very much for the phasing on costs. On revenues, you've already guided that 2021 revenues will be a little below $8.2 billion, and you've got the $8.7 billion target for 2024. I was wondering if you could help us with the phasing for 2022 and 2023, and your comments just now on an operating result of over $1 billion for 2022 seem to imply something around $8 billion revenues for 2022.
I just wanted to check really on the phasing of revenues '22 and '23, please. Yeah. Thanks for the question. Let's start with Michael on corporate clients and then Bettina on guiding the revenues. Actually, Rohit, both. First of all, exiting clients, but the other one, which is even more important, is increasing profitability of our low-yielding clients, below 3%. What we do is, as I said in the speech, we look at each and every client, which doesn't make the 3% hurdle. Here we do the following. We basically try to improve cross-sell as much as possible, and this is where the returns are coming from. But when we can't make it and when we don't see a chance to do that, we clearly will exit the clients. It's a mixture of both elements that we do here. Very good.
On the revenue development, let me start first to put, again, some clarity around the 2021 guidance because I think there was some confusion around that. On 2021, we guide for lower revenues than 2020, lower than the $8.2 billion, slightly lower. That includes the guidance includes the expected TLTRO revenues. What we then see is a recovery, stepwise recovery, both for corporate clients and PSPC, where basically the negative ones, the negative effects are balanced out by positive effects. You can assume a stepwise increase until the $8.7 billion for 2024. Hi. Could I just clarify that, please? Slightly below $8.2 billion in 2021, including $160 million from TLTRO, and then we should assume something like a straight line recovery to the $8.7 billion? Yes, that's what I would definitely assume. Okay. Thank you. Thank you, Rohit.
The next question comes over the audio line again, the nine-star line, and it comes from Anke Reingen from Royal Bank of Canada. Anke, line is yours. Thank you very much for the presentation and taking my question on the old questions line. I just actually had a similar question to the previous one. Concluding, the 2021 revenues should basically be the trough in terms of the trajectory. I was wondering on the mBank $600 million revenues, it seems quite a lot. If I don't think you make the $600 million revenues, can I then assume the costs will be $200 million lower as well? Lastly on strategy. Obviously, there is a big change from when I sat on your previous strategic update.
I just wondered if you can say what's different now, what's making you excited? Is it also the environment? Is your capital ratio stronger, or what has set you on this path? Thank you very much. Yeah, Anke, let me take the question on strategy first. Yes, this is a new strategy which my team and myself have worked out over the last weeks, and we are very confident that this strategy will safeguard and secure the independence of Commerzbank going forward. In private clients, we're combining the best of two worlds: the digital innovative power of Comdirect with excellent advisory capabilities of Commerzbank. In corporate clients, we will focus mainly on the German Mittelstand and on customers with German connectivity. So we are very focused, we are very happy, and we are very clear.
The difference is really that execution is key now, and this team is fully committed as well as all the employees in the bank, and that's why we are so confident. Maybe, Bettina, on revenues. Sure. Perhaps Anke first on the revenues for 2021. Let me just explain why we believe that there will be slightly lower revenues in 2021. Key driver is actually really corporate clients because we believe we will see effects from the streamlining and other RWA optimization measures Michael just presented. So there will be effects out of that. Plus, beside that, we haven't assumed any positive contribution from Commerzventure, and you will recall that in 2020, they really added quite a nice contribution to our revenue side. mBank, we believe, will show an increase in 2021 while PSPC Germany will most likely stay stable. That's basically the outlook for 2021.
On mBank, I mean, it's pretty sure if they do not generate the €600 million revenue growth, you will also not see the €200 million cost increase. So this goes in parallel, and clearly, no revenues, then there will be also not a cost increase. Thank you. If I can just ask one follow-up question, obviously, sort of a concern as we see all the revenue headwinds first and then the tailwinds are only coming in '23, '24. So that's basically wrong. We should think about it. We have the decline in 2021, and then we see a gradual increase as these effects offset each other. Thank you. That's exactly the case. Thank you. Okay. Thank you very much. Thank you, Anke. Now the next question over Teams again, and it comes from Dirk Becker from Allianz Global Investors. Hello, Dirk. Unmute yourself, please. Did that work? Yes.
Oh, fantastic. Thank you very much. Yeah, first of all, a big compliment to Mr. Knopf after only six weeks in the job to come up with such a credible and comprehensive plan, and we're really looking forward to the implementation, and that will be an exciting journey. To my questions, first on page 30 on the private bank, if I understand that correctly, you're looking to increase revenues by $100 million, but at the same time, the risk-weighted assets will go up by $7 billion. So that will dilute the revenue over RWA by over 200 basis points. I was just trying to understand why that is a good idea. Secondly, on the short-term revenue headwinds, isn't it also true that you slightly over-earned last year in your brokerage in Comdirect?
I remember in March, you executed probably in one month as many orders as you usually have in a full year, and that's probably not going to repeat itself. So isn't that also a headwind, the normalization of the brokerage business? Yeah, Dirk, thank you first of all for your kind words. Before I hand that over to Sabine, I think during the corona, we see a change in customer behavior, and this continues in Comdirect. Maybe, Sabine, you can explain and put it in a framework, and then Bettina. Yes. Dirk, I just want to pick up the first RWA because it comes first in my mind at the moment to put it away and then go to the brokerage business. Is it fine for you? Let's start with the RWA.
This is pretty much linked up to 95% to the lending growth, and I need this lending growth to fight against the losses from the deposit side. 50% of this lending growth is the mortgage business, and then it comes nearly half to half between the consumer finance and the loans for the small business clients. They are all with attractive margins, so you can be sure that these RWAs are pretty well invested and help me to increase the NII. That's the first part of the increase of RWAs. The second question is, yeah, we had an extraordinary year in Comdirect, and we didn't plan it for the future. It's not in the plans for 2021, but I can see the January. I can see that the interest rate environment is for private investors, yeah, very critical.
They all ask questions how to invest and how to make sure that their money will be stable. There are a lot of questions in the community, and I think we have the answer with product and with brokerage. It's not in the plan, but I hope that we can scale it up in the future. Basically, not really something to add, except Dirk, if you look on the RWA efficiency and calculate the RWA efficiency, it's still far above 10%. I would say it's still a very decent RWA efficiency, and it's worth to invest. Therefore, I think it's a smart move. Okay. Thank you very much. Thank you, Dirk. Now I would like to take a question from the webcast, and I will read it out. It comes from Jochen Schmidt from Metzler. Hi, Jochen.
You have mentioned in your presentation that you aim to complete the integration of Comdirect in 2022 or 2023. Just one clarification: will the Comdirect brand be kept in the medium term? We give that to Sabine. Yes. It's me again. Today, it's not so important to answer the question because we have two strong brands at the moment, and both of them are growing. The most important question is, is it possible to bring all these IT platforms together to make sure that we gain the synergies from this movement, from the headquarter reduction, and also get rid of some of these IT legacies? For me, it's important that we can see at the moment strong brands. I will keep the customer journeys from Comdirect, and I am sure that it is absolutely necessary to keep it for our brokerage business.
Let's look and let's have a look how it works, and then we come back with the concrete answer. Thank you. The next one is over Teams again and comes from Jeremy CJ from ExambeNP. Jeremy, line's open to you. I hope you're unmuted. Hopefully, you can hear me. Yes, and see you. Perfect. Even better. Two questions, please. One is a detailed question for Bettina, and it's another one on this sort of question of phasing and specifically about the risk-weighted assets. I think you said this morning that you're expecting two sets of RWA inflation in Q1, and I think you said both of them single-digit billions.
It sounded like there could be quite a meaningful step up in RWAs in Q1, maybe as much as $10 billion or something, and then the other effects kick in after that, including some of the reductions. I just wondered if you could talk us through the phasing, Bettina, of the RWA movement, particularly in the 2021 impact. That's my first question. The second question was really for Sabina on the retail side, slightly continuing the previous question and thinking about that relationship between Commerzbank, the parent bank, and Comdirect. From a customer, you mentioned customer journeys. From a customer experience point of view, how integrated will those brands be in the near term? Will a customer of one be offered the services of the other automatically or selectively?
How will you sort of integrate those brands, or how separate will you keep them? Okay. Let me start, Jeremy, with the RWAs for 2021. I mean, we guided that we would expect a capital ratio of above 12%. Given that we have a starting base of 13.2%, and yes, we have the restructuring cost of $900 million, there must be something on the RWA side happening. The thing is that we know that in Q1, there will be effects from TRIM. That will be a single-digit billion number. That's for sure. Then the question on when do we see the rating migrations and the RWA inflation? It might be in Q1. It might be also in Q2, but that's why we have been cautious on guiding on the capital ratio.
I mean, it's very much dependent on the development of the corona pandemic and the economic development. So it's a little bit related to our LOPs where we also have guided for quite a range of the 0.8 to 1.2 for the same reasons. Lots of volatility still in the system. And the second part of your question, the combination of Comdirect experience and Commerzbank experience is at the moment, we are working in different systems. So there are people who could help each other, but there is no systematic approach at the moment. We had the first success to bring up on our online page the first links that you can switch from one to the other if you are a client from Comdirect and a client of Commerzbank.
That's the first tiny, tiny step, but we are working, as I said, to bring the IT systems together. My goal is that you can, as a client, seamlessly walk through this new bank, this digital bank. My mass retail approach will be that you have the impression that you have today at Comdirect. Everything end-to-end is digital. You have helpful hands and helpful ears in our customer centers and in our advisory centers. If it comes to a difficult problem and you need personal help, you can go into our branches. This will be all linked, and we are today able to link all these channels together with our Microsoft Dynamics systems. All channels are linked to each other in every second. Every channel knows what the client is doing at the moment.
I think this could be a good picture for the future. Thank you, Jeremy, and Sabina, of course. The next question is in text again, and I'll read it out, and it goes to Michael, basically. It comes from Cerberus. They ask, "How has the corporate client product and geographic perimeter been optimized to meet the requirements of your core Mittelstand clients? Specifically, what makes you confident that not fully exiting equities, ECM, M&A, and underperforming parts of FICC adds value to shareholders?" Thank you for the question. First of all, international locations, we analyzed each and every location for its relevance for our core clients, the German Mittelstand. We looked at the importance for German trade corridors. We looked at the relevance for German clients and the number of connected clients in this location and financial KPIs.
This is for the international locations to make sure that we cover the trade corridors our clients do need. Regarding the product optimization, the digitized products will be available for the entire client base. All products we digitize will not be just for the direct bank. It will be basically for all the clients we have in the segment. Coming to the investment banking products, we looked at the equity brokerage and for the equity brokerage business, we plan to enter into a corporation, which for all practical reasons means exit. Just to make this clear, we continue to offer ECM origination and IPO advisory. This is very important. We do the advisory and the origination. We continue the advice on capital structuring and debt transactions, and we continue the advising of the structurings. This is what our clients expect from us.
What we basically for the M&A part, we do see a high potential on our SME clients on succession planning. Just to give you a number, we see 40,000 company handovers per year in Germany. So this is a huge potential. When we talk to our clients about succession planning, they expect that we do the M&A transactions. So we advise on the succession, and we do the M&A transactions. If we do not, he would take another bank, and we would lose the whole relationship, the entire relationship. When we talk about M&A, we will strictly confine it to the SME world. What we basically will end where we seek partnerships is the ECM technical execution, sales, trading, equity research, and corporate brokerage service. Here we look for partners.
When you look at the FICC business, it's centered around a profitable and renowned FX platform. We basically have one of Europe's best EFX platforms, and this is what we continue to hold on to. Here we do see declining costs and higher profitability. On commodities, it already is a profitable business that we do. Looking at ESG, 55% of the commodity trading we do is on carbon trading. Thank you, Michael. The next one is now over the audio line again, and it comes from Hugo Cruz from KBW. Hugo, the line's open for you. Please unmute. Hi. Thank you. Can you hear me well? Yep. Three questions. First, if you start to miss on your revenue targets generally, and I guess that's more after 2021, what will you do?
Will you try to cut costs more, or would you accept a lower ROE target? Second, what kind of capital return policy would you like to see after 2022? Specifically, would you prefer dividends or buybacks? Third, what's your exact definition of ROTE? Because I just want to make sure I calculate it the same way as you do. Thank you. Let me start. Miss on revenue targets. I mean, we have been really cautious on planning the revenues. I'm pretty convinced that we will not see a miss on the revenue targets. The whole plan is really very much targeted in the direction of cost reduction and RWA optimization. That's number one. Therefore, we are really convinced that we will meet the ROTE targets. Taking the ROTE, because that was, I think, the third question, it's a return on tangible equity.
You find that also if you look in our documents, even in the analyst presentation, there is in the appendix, there's a clear definition of what is tangible equity, and it's derived from the IFS capital. I don't know which page, but I'm pretty sure you will find it. On capital return policy, we said we keep it open. We have dividends. We have share buybacks. It's totally clear that share buybacks is a very preferred instrument from the perspective of investors. We need to make sure that we get the approval of the ECB. That is an important prerequisite. But I think the most important thing is we see the potential. As I said, up to $3 billion, we see as a potential, and that would move up the ROTE from 7% to 7.8%.
We are very committed to basically provide this capital return to our investors. Great. Thank you. Thank you. The next one's over phone again as well. It comes from Nicholas Herman from Citigroup. Nicholas, go ahead. Yes. Good afternoon. Thank you for taking my question. I just want to clarify that you can hear me all right. We can hear you. It would be great if you could speak slowly because it's not that easy with the line. Sure. No problem. Two questions from my side, please. One on consumer finance and one on corporate clients' revenue efficiency. On PSBC consumer finance, can I just push you to be a bit more granular on that? What level of volumes do you anticipate by 2024? Why can this management team successfully grow the book when it couldn't be done before?
The second question on corporate clients and revenue efficiency, I was a little surprised to see that revenue efficiency in 2024 looks only modestly up versus 2020, which to me appears to be more of a client mix effect rather than a business mix effect. In previous strategy days, you'd guided that about 60% of revenues was coming from lending and only 30% from capital-lighter activities like trade finance and cash management. Just curious in terms of how that mix will look under your new model. Thank you. Okay. The first one. It's linked to the consumer. If I didn't—yeah. It's because of the consumer finance. So we didn't reach the target in the past. And Nicholas, you're asking yourself, how is it going for the future, I think? So we can see slightly, I think, 13% growing path the last year.
Going forward, we are going to double our loan volume from this moment to 2024. That means then that we will have a market share far below our natural market share. That means there is enough space for us to go for it. We have to improve our sales better. That's one thing because our product is attractive. We have different sales channels, and we have to improve the digital sales process. To have the consumer finance business on mobile will be the goal up to the end of this year. I think we can carefully, but go for a growing path in the future. When it comes to the RWA question and going forward, for first years going forward, we do sacrifice revenues streamlining the international business.
Here, when we look at the international side, we basically have a revenue attrition of roughly $300 million. This is basically how revenues have been hit in the first years going forward. This is why also RWA efficiency is taking a slight dip. On the second part of the question, composition of income, when looking at '24, we have a composition of 55% in NII and 45% in net commission income. That's roughly basically the distribution. Thank you. Now I'll turn again to the webcast questions. The first one is from Ian Lepay from Gabelli Funds. It goes, "Please discuss the apparent increase in the strategic importance of Ambank."
Is this due to Ambank's lower stock price or a higher appreciation for its long-term business fundamentals? I mean, Ambank has been also in the past a core element of our strategy and also our profit generation. It will be in the future. Nothing has changed, basically, to be very honest. Thank you. Next one again from the chat is a question from Andreas Thome from Deka Investment. It goes in the first part, it goes both, I believe, to Sabina. What are the measures you take to enhance your market share in small business clients? The second one from Andreas is, what are the loan volume targets for consumer loans which have not grown for two years? Basically, what you just covered two questions before, basically. Then Andreas, I will focus on the small business clients.
First of all, it's important that we have a clear responsibility in our sales organization. In the future, we will have the revenue responsibility in one of my executive team members. We have a clear sales team in Germany. We will combine the personal advisory with also the team advisory and the advisory center and the digital approach. I think we have a really modern sales model also for small business clients. Looking to the digital capabilities we will have in the future, I think it could be very, very interesting for my target group, for the small premium business clients, to make business with us because it will be easy and comfortable for them. Thank you. Let me now turn again to the Teams session. We have another seven minutes to go overall, just for information.
We can start now with a kind of second round also. The second round, as the first round, will be introduced and started by Isabel Dobreva from Morgan Stanley. Isabel, I hope you're unmuted and camera on, and happy to see you again. Hello? I think I have managed. Can you hear me okay? You have absolutely managed. Great. Thank you. So my first question is a little bit of a follow-up on the corporate restructuring. If I look at where you end up in 2024 in your strategic plan, there is still about 22% of RWAs which are below 3% in terms of yield. The bank is still spread in over 40 international locations. So my question is really, what stops you from going further in sizing down in CIB?
What was the binding constraint, or should we think about this as more of a starting point to be potentially revised later? That's my first kind of follow-up. The second one is a bit more technical. It's on slide 60, where you have shown the RWA decomposition. I saw on that slide that you are guiding for a $3 billion RWA increase related to regulation. My question is, does this include Basel IV on a fully loaded basis? Just to make sure that we're clear. Thank you. Before Michael takes over, Isabel, first of all, I think it's important to note that we will continue the German Mittelstand and the German SME abroad. It's very important, and that's what Commerzbank stands for as a partner of the German SME, also doing business in Germany and internationally.
Therefore, international presence is important, even if in some locations, Michael will reduce them. Maybe you can take over. Yes. Thank you, Manfred. To your question regarding the closure of branches we do, we close nine branches till '24. And with the remaining branches, we do feel comfortable. But just don't forget that also for the remaining branches, we do streamline those branches, which means that we will centralize middle and back office work in two hubs, two cost-efficient hubs. And we'll introduce the lean branch concept in Europe, which means that only salespeople will stay in the branch, and the rest has been done in hubs in Europe. We'll streamline here the branches significantly going forward. And we need to be active in the relevant trade corridors of the German economy. And this is exactly what we're up to.
Regarding the RWA concentration, we will always see clients in the bucket below 3% because when we invest in clients, we usually have a certain period until it pays off in cross-sale. This is why we continuously see inflows into the below 3% bucket. But naturally, we keep working on the 22%, trying to get it lower, but it will never basically be zero because we always have new entries investing in loans, and then clients getting out again in the course of a few months. 22% is the goal for 2024, and we'll continue to decrease this. Isabel, on RWA, quickly, the effect in 2024 you see there is basically due to the effect of starting with Basel IV. FRTB market risk, CVA risk, capital charge, and operative.
It is not including the fully fledged effect when the output floor kicks in. Thank you. Thank you. What was this? I don't know. That has been a bang here for whatever reason. Nothing serious, believe me. The next question is from the webcast again, and it comes from Stefan Lacke from Switzerland, asking, "How much in percentage of the back office activities do you plan to transfer to nearshoring, and what are the plans for farshoring?" I believe this goes definitely to Jörg. Absolutely. Now, Jörg, we can bring you into the play here. Yeah. Yeah. Therefore, many thanks for the question. I already thought that there will be none for me. Stefan, I'm really happy. On nearshoring, I think we have to distinguish here.
On the one hand, what we will do is we will beef up further our resources, our tech resources in nearshoring locations in Central Europe. So we have three hubs in Łódź, in Prague, and in Sofia. There we want to double up the number of colleagues working there from currently 700 to 800 up to 1,400 within the range of our strategic frame. Next to that, we also use intensively nearshoring on the operation side. There we see also a further increase. We will also add resources in Kuala Lumpur, where we have started with nearshoring on the trade finance side, and we want to build up Kuala Lumpur to a bigger shoring hub. This also contains a farshoring component, if you want to say so. Thanks. Thank you.
Looking at the time, basically, I now announce the final one, the final speaker, the final question. I was talking about first round and second round. As we do have one left from the first round, I prioritize him in this case over the one that was pitching for the second round. So the last one's coming over Teams, and it comes from Tobias Lukesch from Kepler Chevreux. Tobias, please go ahead with your question. The delay comes from that I changed the order. But now, Tobias, you're on. You're on screen, and I hope you're unmuted. Eric, can't you hear me? Yeah. Yeah. Thank you for taking my questions. I have two. One is for you, Kassenmüller, again on the IT and the digitalization. I mean, this has been an issue at the 2016 strategy already for 2020.
Back then, Commerzbank had to confess that a lot of spending basically was not successful. When did you realize that you need an additional $1 billion to put in that '24 plan compared to the Commerzbank 5.0? How can we be sure that there is enough resources available that we don't have a drag here, i.e., that the FTE reductions are really feasible given that the IT setup is in place? The second question is on the risk side. There was a comment from Mr. Gromik earlier on the insolvencies. If I got that correctly, he said that he expects these insolvency rates to increase by four times, if I'm not mistaken. I was wondering how this then actually matches with the kind of potential risk-cost planning for the coming periods, especially for '21.
I would say a risk-cost, a target close to what we have seen might also be within reach given such a scenario. Thank you. Okay. I think then, Jörg, you can take the question, and you have a second one. For the final, we close with our risk officer, Markus. Yeah. Tobias, many thanks for the question. As you've said, we started our journey towards digitization in 2016, and we have already achieved a lot since then. So there is a basis on which we can now base the future developments. Why is $1.7 billion the right figure? We will invest a lot in enabling Sabina in her journey to combining two banks and to move them into a primary digital business on the retail side. There we will invest roughly 35%.
We also have to support kind of our corporate customer clients because also there a significant transformation on the technology side is necessary. On top of this, and this is an important enabler, we will continue to invest into the tech basis. We have mentioned our journey into the cloud, which will help us next to other enablers that we spend the money on the right topics and fast and efficient. Previously, I kind of said that part of our nearshoring strategy is building up further tech capacities in our nearshoring center. This is another enabler which will allow us to deliver on our plans. I hope this helps you. Yeah. Tobias, regarding your question, when you look at the insolvencies in 2019 in Germany, you basically saw 20,000 to 25,000 cases.
You saw them basically this number dropping by 50% in 2020 because of the moratoria and so on and also the state support. When you just assume what would be the refill effect or the fill-up effect from the past and the normal rate, you're ending up with 40,000, and that gets at least the number of four. Two comments on that one. That will most likely occur, of course, in the very small business space. Small business customers will be affected. There you will see this many cases. Secondly, it will, of course, hit those sectors which are obviously very immediately affected from COVID, i.e., stationery retail, tourism, gastronomy, and so on. As you can see on the presentation, these are sectors where we are underweighted in our portfolio.
We're also not really depending to a large extent from commercial real estate, especially not commercial real estate with retail associated revenues. That's why I feel comfortable with our LLP planning for the upcoming year together with the TLA. But as a risk manager, I always say I don't have a crystal ball. It all depends, of course, very much whether the lockdown will continue or whether there will be a third one that we can't rule out, of course. Thanks. Thank you very much for this lively debate and for all your questions. Apologies if there has been any kind of technical problem throughout the session. A personal sorry for Johannes. I think it was probably my personal fault that you didn't come up with your tone because I thought you're in Teams, but you were actually on audio. Sorry for that. Next be on me.
Please get back to our investor relations department in case you still have any open questions or further questions. Come up to us and go into the discussion with us, guys. Other than that, we all look very much forward to seeing you again as soon as possible, hopefully in person as soon as the situation allows. Thank you very much, and bye-bye.