Hello, everyone. Welcome on financial results conference of Citi Handlowy for the third quarter. My name is Adam Piotrak. I'm responsible for investor relations at Citi Handlowy. I'm with Maciej Krywoniuk, the Head of Strategy and Investor Relations Department. Run this presentation. Maciej, the floor is yours.
Thank you very much, Adam, and welcome, everyone. Thank you very much for joining. We will be sharing the presentation on screen. You have it also available on our web page. So, I'm moving on to slide number two now, which is a summary of third quarter financial results. I will start by saying that this was very, very strong quarter for the bank. When you look at the first nine months of 2023, the net income level is at the level of PLN 1.8 billion. And it's my pleasure to share that this is above the record net income for full year 2022. And so, this is a piece of good news this quarter.
In terms of the financial results in the third quarter, the revenue was at PLN 1.1 billion, and that profit reached PLN 592 million. This landed us with return on equity level at 13.7%. So, very, very high level compared to previous, previous quarters. When you look at the balance sheet performance, and I'll cover it more in more details on the next slide, but what we have observed is still relatively limited demand for new loans among the corporate sides, and similarly in the consumer business. However, there is some positive signals in the third quarter reflecting the slightly lower interest rates. And deposits, they are growing at 8% this quarter.
In terms of the capital position of the bank, the total capital ratio 23%. This is a reflection of the fact that Polish FSA approved 800 million PLN as Tier 1 capital. And as the 23% is making us meet the TLAC criteria that the bank shared with you some time back. Moving on to institutional banking and the performance there. So revenue was at stable level compared to second quarter 2023. I've touched upon loans, so the loans volumes unchanged quarter-over-quarter. There was some rebound that we observed, especially among global clients, which grew 5% quarter-over-quarter. And there was sluggish performance in commercial bank with 1% quarter-over-quarter growth. I've mentioned the positive sentiment.
What we observe is that among our newly granted loans, majority of which were long-term loans, which is a good signal for us. In terms of transactions, we have observed return of activity on the commercial securities markets. We participated in bond issue for EIB with the value of PLN 400 . In commercial banking, one of the growth engines is the new economy components. So, the digital leaders are among our clients, and so we actively conduct business activity with them. The payment transaction volumes in the commercial banking segment increased 6% quarter-over-quarter. Good news in transactional banking line, we see growth of operating accounts. The business volumes are also growing. The domestic transaction volume increased by 10% quarter-over-quarter.
At the same time, in the fees and commission income line from payment transaction, we noticed 4% growth quarter-on-quarter. Consumer banking, this is a segment which recorded very good set of results this quarter. Although on the top line there, you can see the decrease, 5% quarter-on-quarter. However, this is a result of one-off events recorded in the second Q. So core client revenue grew by 10% quarter-on-quarter, despite slightly lower rates environment. The private banking, and it's a story we've been sharing with you for several months and several quarters. We are observing increase in number of Citigold Private Client portfolio, which grew by 13% quarter-on-quarter. Citigold's client base also grew 5% quarter-on-quarter.
Now, this resulted in, you know, significant increase in the sale of investment product, which grew 18%. And in fact, we recorded high quarterly sale. That was record high quarterly sale volume since first quarter of 2022. Our clients are actively using the Citi Kantor Solution, which is the FX solution for our clients. Number of transactions realized and processed by our Citi Kantor grew by 10%. The FX volumes are flattish. There was slight increase by 1% quarter-on-quarter. Unsecured loans, there was improvement among individual clients. I've mentioned the positive sentiments toward lending. And we have observed a strong acquisition of credit cards.
Also the sales of cash loan increased, and it was a healthy 18% growth quarter-over-quarter. Moving into business volumes, I'll start with institutional banking. So the loan volume in this segment decreased year-on-year 6%, and it was flat quarter-on-quarter. This is a reflection of, firstly, high rates environment, and on the other hand, also some uncertainty in the operating environment. I've mentioned stable levels of loan portfolio in the commercial banking and an increase among global clients. And in terms of the deposit volume, what you can see at the left bottom hand of the slide, it's a growing volume, 8% growth year-on-year, 3% growth quarter-on-quarter. And in fact, commercial banking is growing most dynamically.
It's a segment where we have observed four quarters of consecutive growth. I commented on the new loans to institutional clients. There is 1.6 of new volume. I've mentioned majority of it is the new loans for longer periods, long-term loans, and this is a good sign for us. The FX volumes are a reflection of very strong volumes last year, which was a year of very high volatility. So there is a drop of FX volumes almost 40% year-over-year against 2022. The transactional banking number of cross-border money transfer as well as corporate cards transactions and online transactions are growing. It's a reflection of strong client activity among our corporates. Moving on to consumer banking.
This is a segment where the loan portfolio declines 6% year-over-year. We managed to stabilize the portfolio quarter-over-quarter. And in terms of the deposit volumes, this is where we are observing very steady and healthy growth, 7% year-over-year, 5% quarter-on-quarter. I would comment here that it's a reflection of several things. We definitely... Our pricing policy is attractive for the clients. I would say that this deposit strategy is, in a way, our cost of acquiring new clients, especially in the space of Citigold Private Client and Citigold segments. This is the model where it's based on the cross-sell of wealth management products to our deposit clients.
When you look at the business and financial results, we are doing it effectively. I've commented on the FX volumes at the opening. It's these are, you know, healthy numbers. The FX volumes are primarily executed via online channels, and there is also positive trends in cards, where both, you know, cards transactions value, domestic and cross-border, is growing. It's been a quarter with holiday season, and it's also there is some specific for the third quarter, where there is more transactions that are done abroad among our client base. However, this year-over-year growth is something that is playing in our favor. Moving on to a slide where we cover our ESG theme.
Basically, I would say that. We have committed the net zero target for own operations, i.e., Scope 1 and Scope 2, for by 2030. It's also linked with clearly laid out strategic plan, how we are gonna achieve that. Definitely, we want to use 100% energy from renewable sources. We will also increase the energy efficiency of our buildings, and I think what's important here is the refurbishment of our Senatorska headquarters building in Warsaw. You know, achieving this goal would not be possible without the refurbishment, and there is a number of solutions that are very much oriented towards lower emissions and more sustainable consumption of media. We have had the pleasure of hosting Val Smith, who is Citi's Chief Sustainability Officer.
She was in Poland, meeting our clients. She attended several business forums, so very positive feedback from our clients, and we have been able to share some of the global experience among our clients here locally in Poland on the ESG front. Now moving on to the financial results. Moving on to slide seven, which is the revenue slide. When you look at the total revenue, this is significantly above 2022 level, 49% growth. A few words of explanation around third quarter. When you look at the top line, you can notice that it's slightly, 1% down quarter-over-quarter. However, second quarter was a quarter characterized by several one-offs. There were PLN 8 million revenue around dividends, and there was PLN 12 million of equity investments, valuation, impacting positively the top line. When you clean up the numbers, the ex one-offs, the revenue is growing.
There was also some one-offs around provisions for [CHF] with strength portfolio in the third quarter. So ex one-offs, the top line is growing. It's a reflection of this growth is a reflection of both sales, business volumes, and treasury activity. This will be three things I would point to. In the spirit of transparency, when you look at the client's revenue in the institutional banking, there is a decline, 21% decline, in the ICG space.
Two core factors are FX line and the interest expense line. So this is what's impacting the institutional banking revenue. Now, on the consumer banking, there's growth both year-over-year and quarter-over-quarter. I have commented on the Citigold and CPC, and this is where there is positive contribution to our revenue growth in the consumer banking space from the wealth management activity. It's also contributing positively to net fees and commissions line, which is growing. Moving on to net fees and commissions, it's. I would comment more on the right-hand side of the slide and spend some time on the structure. So, I've mentioned some revival and some positive sentiment around GSG clients in the lending space.
You see the fees from loans are growing, and it's directly attributed to this positive sentiment. Definitely, what we see is the lack of one-offs in the capital market transactions, and this is negatively impacting the fees and commercial line. And I've discussed the contribution from deposit clients in the transaction banking line, and you see, it's an important component of the mix with 62% share. And this is growing both quarter-over-quarter and year-over-year. The consumer banking, you see in the description of the structure, that new clients that we have acquired, I've mentioned that both CPC and Citigold clients portfolios are growing.
The new clients acquired in the last 12 months are generating more than 65% of revenue. This is primarily in the investment product balances, which grew 13%. This is the cross-sell that we are executing from our deposit base, and it's visible in the investment product line, where fees are growing both quarter and quarter 2% and 9% year-over-year. There is very healthy growth in dual currency investments, the balance of which increased by 45% quarter-over-quarter. Cards, positive trends in cards as well, in the fee line, both 8% quarter-over-quarter and 15% year-over-year growth. Moving on to our treasury activity.
We have always shared with you that it's a line when you need to look at this more from a long-term perspective, not necessarily the quarterly one. There was a strong performance in the last 12 months. Both trading income and net interest income, you can see that it's been a very, very strong performance in the last three quarters. Speaking of FX income, which is a reflection of the client activity, I've mentioned that 2022 was a record year in volumes, with this extraordinary high volatility linked with the war in Ukraine. But we were able to achieve this stable revenue stream.
Finishing up the treasury slides, I think it's worth to underline that the revaluation reserve, the negative revaluation reserve, is more and more positively impacting the capital position, with decrease of the negative impact from the revaluation of the portfolio. Expenses, the next slide is a story of the cost discipline, something we've been recognized for and something we put high attention to. The third quarter was a quarter where traditionally we have released holiday accrual. And the cost line decreased quarter-over-quarter, 2%. Year-over-year, we have observed 8% growth.
Talking of which, I would point to several aspects explaining a little bit of the increase in expenses. So definitely staff expenses is a reflection of increase in average salaries level among bank employees, and this negatively impacted the cost line. There is also the real estate cost. I've mentioned the refurbishment of our headquarters building. So, it's behind the PLN 12 million growth of the real estate category, and there is also higher energy costs that we incurred. And this is the twelve million that you see growing. Short comment on the PLN 49 million decrease in regulatory expenses.
Basically, the regulatory expenses decrease is a reflection of lower banking guarantee fee charges that we incurred this year compared to previous year. This is the cost line. The cost of risk, I would say in one word, it's stable. It's something that that is a good news from our perspective. We have got a early warning system that is working. The 2023, commenting it more in a long-term horizon, was a year when we reversed some of the statistical macroeconomic provisions. I think there is several news in and out there in terms of the specific industry performance.
I want to assure you that we have been running several stress tests in our corporate portfolio, and there is no industry specific negative signals among our clients. And it's a reflection of our carefully selected target market, I would say. Looking forward to 2024, I would say there is a positive sentiment, and basically, there are no worrying signs at the moment that we would be sharing with you. In short, this is the presentation. In case you have any questions, the floor is yours. So we open up to questions, and we will be addressing them.
Okay, Maciej, it seems that we don't have any questions. Thank you for your presentations. If you will have any questions, feel free to contact with us. Our contact details is on the website, CitiHandlowy/investorrelations. Have a nice evening, and see you, and hear you next quarter.
Thank you very much, and looking forward to our next earnings release.