Customers across our core markets spanning Austria, Germany, the Netherlands, Switzerland, Western Europe, and the United States. We are about delivering results. This past year, we delivered a return on tangible equity of 26% and have averaged 18% over the last 13 years, which included eight years of zero or negative rates, in which we have under-earned as a franchise. Since 2012, we have increased EPS 23 x from EUR 0.42 per share to EUR 9.60 per share, doubled our customer loans to EUR 50 billion after closing both acquisitions, and extended EUR 79 billion of credit to our customers. It has been a remarkable run since 2012. Stepping back and reviewing the long arc of our transformation offers valuable insights into how we run the bank.
We are in constant motion. Therefore, it is important to pause and highlight key accomplishments, but equally important to explain how we run the bank, as this will inform you as to the principles and approach for the years ahead. The early years were defined by right-sizing the business and setting our foundation. We invested heavily in fixing the basics: our strategy, our leadership team, our cost base, and our balance sheet. After setting the foundation, we pivoted to planting the seeds for growth, which culminated in our IPO in 2017. In turn, we delivered an average RoTCE of 18% over this 13-year period, delivering one of the best return profiles across all banks. This profitability allowed us to generate significant amounts of capital, which we invested in growing our customer franchise, M&A, and our digital transformation.
Our success is a testimony to the merits of being patient, disciplined, and making decisions with a long-term perspective. This long-term mindset has underpinned our transformation. We invested EUR 1.7 billion into the franchise, with a primary focus on the retail and SME business, transforming from a branch-heavy business with limited digital capabilities to a digital bank with a high-quality advisory network. We self-funded 14 acquisitions, expanded our footprint into six new markets, cultivated a great culture, built a strong leadership team with a deep bench, and rewarded our shareholders with EUR 3 billion capital distributions since our IPO in 2017. However, our best years lie ahead.
We are targeting a net profit of over EUR 1 billion in 2027 while also generating excess capital of over EUR 1 billion through 2027, which is incremental to the capital needed to achieve our net profit target and after accounting for our 55% dividend payout ratio. As a digital bank with a high-quality advisory network, we will be the beneficiaries of greater scale and efficiencies, greater digital engagement, a wider geographic footprint, and more opportunities to pursue with a significant amount of dry powder on hand. We are set to consistently deliver a return on tangible common equity of over 20% across all cycles and average gross capital generation of over 375 basis points. The franchise is capturing the compounding benefits of our investments over the years, as well as the benefits of the two recent strategic acquisitions. Moving to slide 4, a recap of our performance since our IPO.
Since our IPO in 2017, BAWAG Group has delivered a total shareholder return of over 200%, outperforming the European Bank Index by over 2x. Our focus is not on short-term stock performance, but we do believe the stock price over the long term is a good measure of a company's performance. We pride ourselves on delivering consistent results year in and year out, irrespective of stock price movements and across all cycles. Since the IPO, we've grown EPS by a CAGR of 12% and DPS by a CAGR of 38%. We have distributed 3 billion of capital to the shareholders in the form of 2.1 billion of dividends for a cumulative DPS of EUR 25.20 per share and executed EUR 900 million of buybacks across three separate programs. Our buybacks were executed at an average price of EUR 41.60 per share.
We have a strong shareholder base that has supported us over the years, and we hope to continue rewarding you for your support. As a management team, we are deeply vested in the company with a collective ownership of 4.5%. We take great pride in delivering on our commitments and acting as good stewards of the bank, knowing that so many have entrusted us with their savings, retirements, and investments. On slide 5, our core principles. The core principles of how we run the bank center around being patient and disciplined, being good stewards of capital, and building a strong culture, as this is our foundation. Patience and discipline means focusing on the things that you can control. This means less strategy talk and more execution.
This means consistently keeping a conservative risk appetite in how we adapt to underlying market developments, be it rising interest rates, irrational pricing, or deciding to stay patient and forgo volume growth as underwriting standards deteriorate. This means focusing on risk-adjusted returns, not chasing volume growth or overpaying for acquisitions, and making investments with a long-term view. This is not always appreciated when companies are measured quarter to quarter and requires a leadership team that will stay the course, stick to its principles, and cut out the noise. However, such companies are rewarded over the long term as they avoid the sins of short-termism and manage the franchise with a view of years versus quarters. Being good stewards of capital means being prudent and disciplined in capital allocation. Disciplined capital allocation and M&A in specific is key to our strategy and how we run the bank.
This holds true for our capital distribution plans and how we extend credit to our customers, make long-term investments, maintain our fortress balance sheet, invest in our team members, and always be ready to capitalize on unique opportunities. Building a strong culture is the foundation of our company. Culture matters and is what we've repeatedly identified as the key difference between good companies and bad. In our experience, most companies have hard workers and committed employees. However, failure usually stems from poor culture and a failure of leadership. Building a talented team that is passionate and committed with a continuous improvement mindset and an owner-operator mentality is fundamental to our culture. This is built into our DNA and how we run the company. Moving on to slide 6, our franchise evolution. Our strategy has been consistent since 2012.
Our three strategic pillars have guided our transformation in the past and will guide us in the future. Our primary focus has and will always be on execution and doing our best to consistently deliver results. We focus on growth in our core markets, efficiency through operational excellence, and maintaining a safe and secure risk profile. Although these strategic pillars are simple, they are at the core of how we run the bank, specifically the type of growth we pursue, our focus on efficiency through simplification, process re-engineering, and using technology as a business enabler, and the conservatism that defines our risk appetite. Across all key metrics, we have delivered superior growth and returns, emphasized efficiency through operational excellence, and fortified our balance sheet.
Since 2012, we have grown core revenues by a CAGR of 6%, decreased our cost income ratio by 37 points to 33%, and decreased our NPL ratio by over two-thirds from 2.5% to 80 basis points. Our primary focus over the years has been growing our retail and SME franchise. After the early years rebuilding our foundation, we completed our first acquisition in 2015 with the purchase of Volksbank's Austrian leasing business and have closed 13 acquisitions since that point. We believe that the DACH region, made up of Austria, Germany, the Netherlands, and Switzerland, is attractive given the macroeconomic backdrop, fiscal discipline, opportunities for digital transformation, niche specialty finance space, and potential for greater banking consolidation and efficiencies. The midterm goal for our franchise is to be 90% retail and SME and DACH-focused and 90% secured or public sector lending, with 90% of assets originating through digital non-branch channels.
We complement this broad DACH regional focus with a targeted retail and SME approach in Western Europe, primarily focused on Ireland and the United States, where we have started from a smaller base and will grow through community banking platforms and leveraging group-wide operating infrastructure and capabilities. Our non-retail and SME business is a combination of niche capabilities across real estate, corporate, and public sector lending that provides earnings and geographic diversification, excellent risk-adjusted returns, and at times unique synergies with our retail and SME franchise. Moving to slide 7, M&A as a differentiator. The focus of our M&A strategy has been building out a retail and SME business. This has taken many shapes and sizes, from buying product factories to specialty finance companies such as PayLife Credit Cards, Hello bank!'s Austrian online brokerage business, a German-Swiss factoring business, and an auto and equipment leasing platform.
We also buy banks that need operational turnarounds, such as Südwestbank and Start:Bausparkasse in Austria. At times, we have also pursued wind-down opportunities with complementary asset portfolios, such as the Dexia and DEPFA public sector portfolios, where we use our operational platform to wind down the business while buying assets at good risk-adjusted returns. Our recent acquisitions of Knab and Barclays Consumer Bank Europe are two high-quality retail and SME franchises with digital native customers that will provide us with a large footprint to expand our business in the Netherlands and Germany. In total, we have completed 14 M&A transactions that have allowed us to bring in 2.5 million new customers, enter four new markets, and add six new retail and SME products. We use our teams to do due diligence, underwrite, and integrate acquisitions.
We focus on the basics, enhancing the overall tech ops environment, centralizing group functions, prudent capital management, decoupling from TSAs and third parties, providing capital and liquidity for profitable growth and investments, and instilling a culture of ownership and accountability. Our financial criteria for acquisitions have been consistent throughout, deploying our capital and operational capabilities in deals that meet our group return requirements of a RoTCE of greater than 20%. We've learned a great deal over the years and refined our approach, learning from our mistakes and looking to constantly improve. Day one requires clear and transparent communication, relaying our values in the strategic direction, not shying away from tough decisions, having an execution bias, emphasizing the merits of staying patient and disciplined, not feeling compelled to chase volume, and always speaking with one voice and as one team.
Looking ahead, we see a European banking landscape that is still highly fragmented, with Austria and Germany in particular representing two of the most fragmented markets. We believe consolidation is the catalyst for building stronger European banks that can address the challenges stemming from broken cost structures, over-leveraged balance sheets, and subpar technology. We keep an active list of potential targets that we believe would fit well with our business, and we will diligently pursue such opportunities when they become available. We target both small and large transactions, but will always remain disciplined in our approach to M&A. Our acquisitions of Knab and Barclays Consumer Bank Europe exemplify the patient and disciplined approach we take towards M&A. Both deals were on our internal game board, with one deal being pursued for almost a decade.
We were fortunate last year in having the team, infrastructure, and operational know-how to pursue and ultimately buy two high-quality franchises. Our experience with M&A transactions and integrations, the remarkable commitment of our teams, and the continuity of leadership allowed us to pursue these opportunities. Although we cannot dictate the timing of deals, we can ensure we are ready once they present themselves. On slide 8, being good stewards of capital, we generate significant amounts of capital each year. Since 2012, we have averaged a RoTCE of 18% and generated significant amounts of capital, which we then used to make loans, investments, acquisitions, and capital distributions in a manner that we believe was both prudent and disciplined. We took a long-term approach to building a resilient franchise that could withstand all economic cycles and serve as a source of strength for our customers and communities, employees, and shareholders.
We extended EUR 79 billion of credit to customers as we doubled our customer loans from EUR 25 billion to EUR 50 billion. We invested EUR 1.7 billion into our transformation, focusing on technology investments that enabled our digital bank transformation while modernizing our branch advisory network, fundamentally fixing our cost base, and shoring up our balance sheet by exiting legacy assets and non-core businesses. We made 14 acquisitions that were all self-funded from organic capital generation, including the two most recent strategic acquisitions last year that will build out our retail and SME franchise and accelerate our digital transformation. We rebuilt our capital base, increasing our CET1 capital by EUR 1.8 billion from EUR 1.3 billion to EUR 3.1 billion, and in turn, significantly bolstering our CET1 ratio from 6.2% in 2012 to 13.8% on a pro forma basis today.
Today, our CET1 target is 12.5% for the franchise, with a solid capital base and business model that generates significant amounts of capital each year. We don't emphasize enough the transformation and risk management that took place as we rebuilt our capital base, enhanced our liquidity profile, reduced the amount of balance sheet leverage, and significantly improved asset quality and business mix. And we distributed EUR 3 billion of capital to our shareholders since our IPO in the form of EUR 2.1 billion of dividends and EUR 900 million of buybacks. Moving to slide 9, the BAWAG culture. Our success was only possible because we cultivated the right culture. This was reflected in how our team members work together and the respect that we have for each other. It is how we set priorities and the values we espouse. It is captured in our meritocratic principles, valuing work ethic, character, and performance.
We believe in a flat organization, encouraging open dialogue, streamlined decision-making, and a continuous improvement mindset. We pride ourselves on challenging the status quo, promoting the best and brightest, and not shying away from change, knowing that this is the only constant. Building a talented team to a common purpose that is passionate, curious, and committed to the team versus individual goals defines BAWAG Group. Our senior leadership team has worked closely together since the early days of our transformation, with an average tenure of the senior leader standing at 14 years. However, we need to ensure we guard against complacency and a false sense of entitlement. Our success is not guaranteed.
The businesses that have proven to be resilient are those which proactively adapt with a sense of urgency led by committed and passionate team members that care deeply about their company, serving their customers, and invested in their communities. At BAWAG, it is okay to take risks and make mistakes. This is part of our culture, developing talent, and making sure we provide opportunity for development and personal growth. We are deeply committed to meritocratic principles, promoting a diverse workforce and inclusion. This is best reflected in team members representing over 50 nationalities. Our diversity is a core strength of the group. However, this never comes at the expense of merit, work ethic, integrity, and accountability. We also believe in keeping a simple and flat organization, doing our best to break silos and get rid of unnecessary hierarchies that do nothing but feed egos and create sprawling bureaucracies.
We instituted a three-layer structure across the group to enforce a flat organization and encourage open and transparent dialogue. The management board and senior leadership team are deeply vested in the bank, serving as both fiduciaries and shareholders. Collectively, we own 4.5% of the bank, of which 75% of shares were purchased in the open market. We believe in promoting an owner-operator mindset that truly differentiates us from most companies. We measure success in years, not in quarters, as we are committed to the long-term development of the franchise. We have had multiple events that have tested our leadership over the years, which have only made the team stronger and more resilient. Earlier this year, the supervisory board extended the contracts of all six management board members through the end of 2029, reflecting our collective commitment to the franchise.
We have also recently set up the BAWAG Group Executive Council, made up of 29 executives and the six management board members, that both deepens our leadership bench and provides a forum for greater connectivity and collaboration across the group as we continue to grow. 70% of the group is made up of executives in both markets and tech ops roles, reflecting the changing contours of our business and the importance of customer-facing and technology in our digital transformation. Culture matters. To be successful year in and year out, we must never fall victim to short-termism or complacency. A dynamic organization is one that constantly adapts to customer needs, regulatory changes, and can capture new market opportunities. We must prepare for the future, continuously evolving and investing in our franchise.
Even though our company is in great shape, we need to remain vigilant and guarding against complacency and adapt from a position of strength. Focusing on the things that we can control and embracing a continuous improvement mindset leads to long-term compounding benefits. As a management team, we have made our fair share of mistakes and surely will make many more. However, we will continue to learn and grow from these experiences and sharpen our capabilities. On slide 10, a summary of our 2027 targets. Despite another record year in 2024, our best years lie ahead. The resilience of our franchise lies in our ability to deliver results across all cycles as we are built for all seasons. Our approach is consistent: focus on the things you can control, be patient and disciplined, keep a conservative risk appetite, and only pursue long-term profitable growth.
Our team is focused on delivering on our commitments. We are deeply committed to the long-term success of the franchise, not only our 2027 target, but many years ahead. Our target is quite simple: 1 plus 1 in 2027. We are targeting net profit greater than EUR 1 billion in 2027 while also generating excess capital of over EUR 1 billion through 2027, which is incremental to the capital needed to achieve our net profit target and after accounting for our dividend payout policy. In aggregate, from 2025 through 2027, based on our dividend payout ratio of 55%, we plan to generate over EUR 2.7 billion of net profit, of which approximately EUR 1.5 billion we plan to distribute in the form of dividends and have more than EUR 1 billion of excess capital still to allocate, based on our CET1 target of 12.5%.
We hope to deploy our excess capital towards incremental organic growth, further M&A, and/or capital distributions. Underpinning our targets is conservatism and an assurance that we will not overextend ourselves as we stay patient and disciplined in how we run the bank. With that, I'll turn it over to Sat.
Thanks, Anas. For those that don't know me, my name is Sat Shah. I'm Deputy CEO and the head of the retail and SME business. I've been with BAWAG Group for under a decade or over a decade and held various leadership roles throughout the organization. Jumping into the retail segment, before touching on slide 12, I wanted to give you a bit of a background. Today, our retail franchise accounts for over 80% of the group revenues, serving more than four million customers. We've had a strong runway of a mix of organic growth and M&A, closing 14 acquisitions to date. Most recently, we closed on Knab in the Netherlands and Barclays Consumer Bank Europe in Germany, which are transformative in nature and fit perfectly into our strategy. I'll touch on these later, but think it's important to take a step back and reflect on our transformation.
For context, in 2012, our retail franchise represented less than 50% of the group revenues, had 1.5 million customers, and only operated in one market, Austria. At its core, our transformation was about fixing the basics, relooking at our strategy, changing the culture, simplifying the organization, and then investing into growth. The first phase was concentrating on right-sizing the business. This was an essential step to position us for sustainable growth for the long term. During this phase, we exited non-core areas, streamlined our balance sheet, re-engineered processes, and began to shift to a leaner, more advisory-focused branch network. The second phase was planting seeds for growth. By fixing the basics and simplifying the organization, we were able to begin leveraging technology as an enabler for growth and achieving the next level of efficiency.
From enhancing our digital customer journeys to digitizing the back-end processes, we've prioritized building frictionless experiences for our customers. The investments we've made are focused on value-driven initiatives versus creating unnecessary bells and whistles. During this period, we finalized the transition of our branch strategy of becoming an advisory-based network with 78 modern locations. In addition, since 2015, we've acquired 14 strategic businesses across our core markets. And finally, today, we have transformed from a traditional retail bank to a digital bank with a high-quality advisory network. We have four million customers and are present in seven geographies. In the near term, teams are busy integrating the two acquisitions, and in the midterm, we will continue to invest in technology and in growth. In 2025, we will spend greater than 30% of our total spend on technology, and this share will continue to increase over the midterm.
Overall, our focus as a group is to continue growing our retail franchise and continuing to become more digital. In the midterm, we expect our retail franchise to be approximately 90% of the group revenues and 90% coming from digital originations. Moving on to slide 13, our strategy is fairly straightforward and has remained consistent over the past few years. We'll dive deeper into each of these pillars in the upcoming slides, but in summary, number one, we have focused heavily on becoming a digital bank with an advisory network, and this will continue to be our focus. We've streamlined our footprint and shifted a significant portion of our customer base into the digital world. The multi-channel approach of banking our customers will continue to be important, but the share of the digital wallet will continue to increase as we grow.
Today, the majority of our 4 million customers are digital-first, using our digital channels for their everyday financial needs. Secondly, we will continue investing to achieve both growth and efficiency. While we've made great progress, we will continue to invest to stay at the forefront. Our goal is to offer frictionless customer experiences while continuously reducing our cost to serve. Third, organic growth. With greater than 4 million customers, our focus is to continue deepening relationships with our customers. We prioritize highly engaged primary banking customers and leverage multiple channels to foster this engagement. Data analytics plays a key role in delivering the right products at the right time through the preferred channel. Furthermore, we've begun investing into artificial intelligence with notable progress around the customer service and payment transaction monitoring areas. And finally, position for M&A.
Over the course of the transformation, we realized that the issues faced were not unique to BAWAG, but widespread across the European banking sector. After the heavy lifting of our transformation, we started looking for franchise-enhancing deals focused on expanding our retail and SME product offering, expanding our footprint in core markets, identifying opportunities requiring operational turnarounds while avoiding taking on credit risk, and targeting deals to leverage our operational capabilities. We maintain a game board of potential opportunities, and as opportunities arise, we will be ready to act. The two most recent examples are Knab and Barclays Consumer Bank Europe. These are highly transformative for retail and will bring greater than EUR 350 million of annual PBT by 2027. Moving on to slide 14. Here, we've laid out our portfolio of products. Over the past decade, we have consciously built out our portfolio of product offerings.
We offer affordable, transparent, and simple products that are easy to understand. Over time, we've simplified our product offerings and continuously relooked at our risk appetite and returns. Today, 85% of our book consists of secured lending, such as mortgages, auto and movable leases, and inventory finance. We maintain a strong rigor in our underwriting guidelines, with a large majority of approvals fully automated. This not only leads to better customer experience with a quick time to yes and payout process, but also enables us to ensure consistency in underwriting across all channels. I think, Yuda, you got to go back one page. You're on the—no? Looks like one page is gone. Okay. In addition to the lending products, we have a broad suite of fee-generating products, such as current accounts, cards, and advisory services, ranging from securities, insurance, and savings products.
Today, nearly all of our products are fully digitized. Not only does this improve the customer experience, but also significantly reduces our cost to serve. Our broad-based product offering enables us to offer a one-stop shop for our customers and creates a healthy mix of revenues, with greater than 70% being interest income from our lending business. Moving on to the next slide, the multi-channel strategy. Today, we run a multi-brand and multi-channel strategy. Through the transformation, we have expanded into six core markets. Our expansion has been a mix of organic growth and M&A. The transformation has significantly shifted the way we do business with our customer. Our strategy consists of originating products through branch and digital channels. We have local sales organizations where sales teams are in the field, close to the customer.
All the non-sales functions are centralized to leverage the BAWAG Group's scale and synergies, ensuring that we run efficient operations to provide best-in-class customer service. We centrally steer our risk appetite, pricing, technology development, data, and customer analytics. By centrally managing these areas, we steer where capital is deployed as markets shift, leverage technological developments across channels, and overall run very efficient operations, leading to a better customer experience while maintaining disciplined pricing, a low-cost base, and product returns meeting our overall group targets. Starting with our branch channel, we have significantly reduced our footprint and reconfigured the organization, delayering the HQ functions and reinvesting into our sales force. Over the transformation period, we invested heavily into modernizing the footprint to become more focused on higher-touch advisory. We also invested heavily into digitalization and pushed the transactional banking branch customers more and more into the digital world.
By offering digital services in a customer-friendly way, we're seeing the customer behavior shift towards digital. We see a positive trend in the over-the-counter transactions, which are down 85%, with customers leveraging the mobile app, internet banking, and self-service channels. In addition, we see a higher demand for in-person meetings related to a more complex advisory product. We run 78 advisory branches where talks are held in person at physical branches, as well as via video advisory. By having the branches focus more on advisory interaction, we have seen an improvement in customer satisfaction and customer engagement, where our advisory appointments are up 32% year over year. Branches remain an important and profitable channel into the future, and we will look to see where it may make sense to expand our footprint. The second channel we focus on is originations via digital channels.
This includes digital banking via mobile and internet banking, as well as via strategic partners. What sets us apart are our simple, quick, and efficient processes that make it easy to bank with us. In addition, with our low cost to serve, we can compete in fragmented spaces while meeting our targeted minimum returns. Our strategic partners are a mix of traditional names that other financial companies play in, as well as niche relationships where we gain access to consumers that other financial players cannot. Our plug-and-play digital capabilities, mixed with our simple, quick, and efficient processes, position us to plug into those partners quickly. At times, we have exclusivity and take minority ownerships, but for all the relationships, the asset origination is strictly under our defined credit box with full operational, risk, and regulatory controls in place.
Across our digital channels, we see significantly higher digital customer engagement, with greater than 80% digitally active, greater than 75% account customers having the mobile app, and on average, us having more than 20 interactions per month with our digital customers. Today, greater than 80% of our originations will come from the digital non-branch channel, and in the midterm, this will grow above 90%. Moving on to slide 16. Yeah, they got switched. Okay. So slide 16, we recognize technology and data as critical enablers. Yuda, you got to go to slide 17. Two down, please. Yeah. We recognize technology and data as critical enablers to our retail growth strategy. Since 2012, we have invested in over EUR 700 million in technology, with a significant portion allocated to products and platforms. Our product investments were in simplification and digitalization to meet the evolving customer requirements during this period.
On the platforms, we invested in scalability and efficiency across infrastructure, payments, data and analytics, and software development, aiming to become leaders in technology overall. We are strong believers that we are a technology company with a bank. In 2012, we spent 13% of our overall spend in technology. In 2025, this will be greater than 30% of our total OPEX, and in the midterm, this will continue to increase. One standout investment is our cloud and data platform, which has been the most critical technological enabler in recent years. It has allowed us to leverage the state-of-the-art technologies, such as machine learning and AI, to capture value across customer service, sales, compliance, and risk. Today, 100% of our applications and data are in the cloud, driving unit costs down and enabling us to launch commercial applications faster.
We recently deployed our first customer-facing AI use case in under five months. The AI agent has a greater than 70% resolve rate in solving first-level customer service requests. This progress is made by our own in-house teams who are deploying the latest technologies and low-code platforms. They have digitized 90% of our retail and SME products, creating a better customer experience, but also allowing us to reduce the time to market on launching new products by 70%, and finally, our consolidated platforms for customer service and data analytics enable us to sustain high service levels with high customer satisfaction ratings. We can handle greater than 95% of our customer requests within 48 hours. If we move back one slide, please. Okay, so moving on to the next slide.
As we evolved to become a more digitally focused bank, our digital approach has been a core strength of our business and a competitive advantage. We are a data-driven organization and try to measure everything to make informed decisions to ensure we are creating franchise value. Our strategy focuses on banking our existing customer base as well as open market acquisition of new customers. With respect to the new customers, we invest significantly into performance marketing via digital channels, which is targeted, measurable, and dynamic. With respect to the existing customers, we focus on automated engagement via own media and frictionless product and service journeys to efficiently upsell. Both of these channels are underpinned by our advanced analytical and machine learning AI capabilities.
These are focused on proprietary, propensity, and trigger-based modeling, A/B testing, and continuous optimization coupled with personalized messaging in order to drive the right product at the right time through the right channel. In summary, our strong ability to target the customer enables us to grow sales at a lower customer acquisition cost while improving the customer experience. Jumping on to slide 18. Knab and Barclays Consumer Bank Europe are transformative and will be highly accretive acquisitions. We deployed EUR 600 million of capital and will generate greater than EUR 350 million of profit before tax by 2027. Knab is a leading digital bank in the Netherlands. It was founded in 2012 and over time became known as the leading bank for the underserved self-employed. Today, they have approximately 400,000 digital transactional banking customers. The majority of th ese customers use Knab as their main bank and are fee-paying current account customers.
Connected to these accounts are EUR 12.7 billion of granular deposits, and 80% of which are deposit insured. In addition, Knab has EUR 12.7 billion of low-risk Dutch mortgages that were originated through the broker channels. Barclays Consumer Bank Europe is the leading revolving credit card issuer in Germany, with a rich 30-plus-year history. Today, they have more than 1.5 million customers with around EUR 2 billion of revolving card balances and EUR 4 billion of deposits. Both franchises are highly complementary additions with attractive strategic rationales. Number one, they expand our positioning in two of our core markets, creating scale for future organic growth and bolt-on M&A. Secondly, they add 2 million highly digital and highly bankable customers. Third, they expand our product offerings, creating opportunities across the entire BAWAG customer base. Fourth, they add strong teams with deep domain expertise that will be integrated into the group.
And finally, they are highly accretive, profitable franchises with further runway for efficiency as we integrate the franchises into the group. Moving on to slide 19. After completing and integrating 12 acquisitions across multiple geographies, we wanted to touch on the integration playbook we use. While we know this is a heavy undertaking, we've done it multiple times in the past, which brings us confidence in what we're doing. On the integration front, we normally leave the commercial functions in the field close to the customer. Our risk appetite, pricing, technology development, data, and customer analysts tend to be centrally steered, working closely with those commercial teams. On the disentanglement from the transitional service agreements, both parties are heavily reliant on services from their prior owners and third-party providers. As we work through simplification efforts, we bring all core items in-house, absorb tasks, and eliminate reliance on third parties.
This process tends to take approximately 12 months but leads to significant efficiency once the integration is completed. On systems migrations, we leverage established group platforms for data, software development, and cloud infrastructure, and harmonize the architecture wherever possible. Furthermore, we consolidate core product systems such as card processing, thereby simplifying the product portfolio and process landscape. As in other areas, we tend to insource technical expertise and assume ownership across the board. The overall strategy is to simplify as much as possible, whether it's returning regulatory licenses and operating through branches, streamlining the organizational setup, or reducing overhead, fundamentally re-engineering end-to-end processes. We find opportunities to improve quality while creating efficiency. Finally, we relook at the focus areas and ensure the entire organization's focus on the core areas that made the franchise successful.
We spend time harmonizing definitions and how to look at credit, profitability, and cost, and make joint decisions on potential areas to pause or exit. The goal is always to ensure teams are not spread too thin, and the area that made the business so attractive is where the focus sits. Upon integrating the franchises within the BAWAG Group, we will have strong, sustainable, and efficient franchises that will align to the group cost-to-income ratios and generate greater than EUR 350 million of PBT by 2027. And finally, connecting back to the rationale for the acquisitions, we see multiple potential upsides that are not within our plan. With the high digital engagement of the greater than four million customers across the group, we see an opportunity to sell products into the greater customer base.
In addition, with the domain expertise we acquire and the strong platforms in two of our core markets, we also see opportunities for organic and inorganic in-market and cross-border growth. And finally, moving on to slide 20, we have built a strong franchise that has been transformed over time. We have a solid and simple foundation to launch off. We have invested heavily and are highly digital, and we have a great franchise. When you look on the right side of the page and the progress the entire BAWAG team has made, it's tremendous. We love what we do, and while we've made a lot of great progress, we're just getting started and are confident that the best years are still ahead of us. With that, I'll turn it over to Enver.
Thank you, Sat. My name is Enver Sirucic.
I'm the CFO, and I've been in the role for the last eight years. As Enver mentioned, I spent most of my life actually at BAWAG, so for the last 20 years, I've been around. What I would like to do on the next few slides is just to walk you through our assumptions and give you some details on our financial plans. I promise this is going to be the shortest part of the presentation, so we'll get some time back. Just before we go there, on slide 22. Very good. So our core principles and also how that is connected to our financial profile. So if you look at it, it's being patient. It is being disciplined. We care about efficiency and operational excellence, and we do run a very low-risk profile balance sheet.
So if you look at these three main pillars or principles, the first one is, if I would define it, it's not to chase the market. We look more at things from a bottom-line perspective, less from a top-line perspective. We do focus heavily on retail SME, as Sat has laid out, and also that gives us a high quality of earnings, more predictable, more robust in its nature. We don't care about other income trading income whatsoever. Everything is 100% core revenues. And if you follow these principles, what you get at is actually a significantly higher net interest margin versus the market. That's also why we feel quite comfortable on the next couple of pages to lay out a plan that will show you a net interest margin above 300 basis points that is growing in the future.
The second one, Cost-Income Ratio, as a metric for operational excellence and continuous improvement. I think everyone who has followed us knows our culture quite well. We do care about efficiency, and we do care about operational excellence, and that is really our DNA, and a core principle of that is that we do everything in-house. We try to do as much as we can in-house. That is from tech ops to finance to risk to compliance function, and we try not to rely on third parties or consultants at all, and this has been really consistent. If you also look back to the last 10 years, efficiency was a core element, but it's not only about a low-cost base.
We also do care a lot about great customer service and also a great platform that allows us also to grow further or also integrate new businesses or build new products. And the last one is actually the low-risk profile that provides us also with quite significant dry powder. And the combination of that conservative risk appetite and CET1 each year in the coming years. That gives us obviously a lot of dry powder to go after opportunities that may arise. And the interesting thing, all these principles are interlinked and interconnected, so it is important to have a high margin, high efficiency, and low-risk profile altogether, and that is really driving the outperformance of the bank versus the sector.
So on the next page, numbers. As Enver mentioned earlier, our targets are quite simple: one plus one. I think it doesn't get any simpler than that in 2027.
There's a lot of work to get there, but we are very positive about achieving these targets, as we have also consistently done that in the past. We are targeting net profit over EUR 1 billion in 2027 and generating excess capital of more than EUR 1 billion through 2027. In aggregate, from 2025 to 2027, we plan to generate over EUR 2.7 billion of net profit. We are also targeting return on tangible common equity of greater than 20% and a cost-income ratio at the group level of below 33% by 2027. Earnings per share will grow above EUR 13 by 2027, representing an EPS CAGR of more than 10% over the next three years. The important disclaimer: these numbers are prior to any excess capital distributions or any additional M&A.
In a nutshell, if you look at the core drivers behind this, core revenues will grow by EUR 900 million from EUR 1.6 billion in 2024 to EUR 2.5 billion in 2027, representing a CAGR of more than 15%. In terms of overall P&L development, we'll continue to focus on sustainable growth, which also means we assume zero other income in our numbers, and all operating income comes from core revenues. Operating expenses will grow by around EUR 250 million, but 2027 we expect to be lower than 2025 in terms of absolute cost. The risk cost ratio will be around 40 basis points, which reflects our new run rate after integrating both new acquisitions. On the next slide, on core revenues.
The biggest driver is the net interest income, and we target the net interest income to grow by EUR 800 million from 2024 to 2027 and to be above EUR 2.1 billion by 2025. This includes our newly acquired businesses and organic growth. Based on overnight interest rates between 180 basis points, that is in 2025, to 200 basis points, that is our assumption for 2027. We expect our net interest margin to be consistently above 300 basis points through that horizon and to grow each year from 2025 to 2027. While we expect some deposit margin compression in 2025, we do have three main supporting factors. The first one is the high asset margin mix after the two acquisitions, mostly from Barclays Consumer Bank.
Second is we do assume a modest loan growth, which is one to two points above the average GDP growth of the region and also very much in line with our disciplined lending approach. And finally, a positive contribution from the deposit hedge rolloff that will contribute over the next couple of years. On net commission income, we expect an annual growth rate of greater than 3% and to be above EUR 380 million by 2027. The main driver of growth next to our two acquisitions, which will support our payments and credit card income, is the continued strong underlying trend in our retail SME franchise with more focus on advisory business. Next slide, 2025. Operating expenses. So we'll continue to focus on cost efficiency and target a net cost out of one to two percentage points per year of operating expenses of below EUR 800 million by 2027.
This will get us back to a normalized cost-income ratio level of below 33%. Key cost out drivers will be on the integration front. We will heavily focus on the disentanglement from the existing transitional service agreements. Both parties have a significant reliance on third parties and also services from prior owners. On system migrations, we'll consolidate core product systems like the credit card processing system and leverage also our group platform for data software development and cloud infrastructure and also harmonize the overall architecture, and finally, very simple, the strategy is to simplify as much as possible and to eliminate any unnecessary bureaucracy across the group. All these initiatives will drive our continuous improvement approach while we also continue to invest in advisory tech infrastructure and data assets. Disciplined growth and efficiency are key elements of our DNA and a culture of continuous self-assessment yielding incremental improvements every year.
We believe competition revolves around cost to acquire and cost to serve our customers. Our simplicity is derived from our basic business model. We do not have investment banking, prop trading, asset management, or other businesses that introduce operational complexity, greater risk, and ultimately heavy cost burden. We focus on faster time to yes, faster time to funding, simple products underpinned by ease of use, branches to support high-touch and high-quality advisory meetings, and digital tools to support transactional banking. Risk costs. Overall, we improved our risk profile reflecting changing asset mix, net asset growth, economic outlook, and positive asset quality trends. Risk cost stability and low volatility is really a reflection of the conservative underwriting, the stable regions we operate in, and stable asset mix of secured lending. We target 80% of customer loans comprised of collateralized lending and public sector over the medium term.
From a risk perspective, we are in stable economies and expect more of the same positive dynamics to continue over the next years. As we look forward, the combination of our continued mix shift, our underwriting actions that will continue to benefit us in the future, we expect to be at 35-40 basis points risk cost for the next few years. In terms of asset developments, there are two key trends we expect for the next years to continue. The first one is customer lending will continue to grow further while our securities portfolio we assumed will remain stable. That means that more than 90% of our total interest-bearing assets will be from customer lending and less than 10% will be from securities. And the second trend, we will see more retail lending. We expect net asset growth mostly from retail SME loans.
The reason for that is the expansion that has taken place into new markets, also with new products that allows us to grow more into the retail and SME space. Finally, the last page, what is not in the numbers? What are the opportunities and maybe also uncertainties that we have not captured? We will be generating over 375 basis points of CET1 on average in our three-year plan, leaving us with more than EUR 1 billion of excess capital. Our plans do not assume any M&A, any portfolio purchases, or any platform investments. We will look to acquire or invest in platforms or banks in DACH and legacy investments in Europe or the United States. Focus would be on retail and SME. All M&A investments would be underwritten to a RoTCE of over minimum 20% return levels along the lines of our overall group targets.
Having a strong customer funding is the second one, which was always one of our key strengths of the franchise, and it only grew stronger over time. Today, as I mentioned before, we sit on a record EUR 18 billion of cash reserves or 25% of our balance sheet that we would like to deploy. For example, if you look at the securities portfolio today, we reported it's only 5% of our interest-bearing assets. If you go back in time, it was as high as 20% of our interest-bearing assets. So we see potential to deploy more cash into securities if the spread levels come back to the average means that we have seen in the past. Right now, we don't think it would be smart to deploy. On the uncertainty side, the first one, rate environment.
I mean, we have seen a lot of volatility over the last couple of years. Right now, we assume the terminal rate of around 200 basis points in our plan, and to put it in context, in 2024, we delivered a RoTCE of greater than 25%, assuming the rate level that we have seen in 2025. If we did the same and assumed that rates would drop further, even drop below 100 basis points, we would still stick to our RoTCE target of greater than 20% because we know we can deliver these targets even if rates drop below 100. Why? We have seen in a no or negative rate environment when rates were for eight years zero or negative, we delivered over 15% return on tangible common equity, so we feel quite good about it. The second one, credit cycle, talked about asset quality, low risk profile.
But having said that, we are still most exposed to a significant economic downturn and a sharp increase in unemployment rates, which would impact our unsecured consumer business, and the third and last, political environment. I mean, we have seen a lot of volatility in the recent days and weeks. In general, any negative implications from political actions, regulatory changes, or taxes, with the exception of the new Austrian banking levy that was announced at least, that is fully baked into the numbers that we presented today. But overall, we feel very good about 2027, and we see more upside than downside in our numbers. Thank you. Thanks, Enver. In closing, today, BAWAG Group stands as one of the most best-performing European banks, an achievement that has been years in the making and a tremendous source of pride for all of our team members.
I want to thank our customers for placing their trust in us, our shareholders for their continued support, and our committed team members for their passion and commitment. We're going to take a 15-minute break to set up for the Q&A session, and we'll be joined by the rest of the management board on stage. Thank you.