Good morning. Good afternoon. Welcome to everyone, our shareholders, the media. Welcome to yet another quarterly conference dedicated to the results of BNP Paribas Polska. This meeting is special because we are not only going to discuss Q4 results but actually 2024 results altogether. I think it's going to be more interesting than the usual quarterly meeting. The agenda is as follows. This is a typical agenda of our meetings. We have time for Q&A at the end, so I hope we have some dialogue. Let's start with some key highlights. As you know, it was a good year for the bank. We broke a number of records, starting with a net profit which stood at PLN 2.4 billion, the highest ever in the bank's history. Much, much better than in the previous year.
The net profit was achieved despite $800 million in provisions set up against Swiss franc loans. I believe this is very satisfying. Our revenue went up by more than 6%. The key, but not the only driver of growth in revenue was NII, which grew close to 10%. I'm happy to say that we also reported solid growth in NFC by 4.5%.
Coming to return on equity, close to 10%, much above the cost of capital, much better than in 2023 when we set up much bigger legal risk provisions and our ROE was only 8%. This is something we are very proud of, the ROE this year. Revenue. I mentioned the increase of revenues. We improved our net interest margin with costs up 8%. Given the still high inflation, heavy investments, now a growth and technology, I believe this is a fair outcome. We believe that we keep our costs well under control, and we intend to do so to continue managing our costs effectively as a major objective in the future. Volumes. Deposit volumes went up. We manage this side of the balance sheets very actively. We make sure that the liquidity we source can be invested to produce adequate earnings for the bank.
Moving on to loans, the volume of loans last year did not increase. It actually dropped nominally. We reported a small increase in corporate and SME banking by 2%, a drop in retail banking. Now, let me clarify. This drop was due to the fact that it was not until mid-Q2 that we were back to the PLN mortgage loans market. We were getting ready and then revving up throughout the year. Eventually, our sales were satisfying and adequate, and so the drop in retail banking was much lower in Q4 than throughout the year. So we are rather optimistic looking forward. I should also stress another point in the context of the growth rate of loans, specifically our cost of risk at the bank.
Once again, we're definitely the lowest across the peer group of the banks that have published their financial results, which underscores the high quality of our loan portfolio and the effective and smart risk management, as well as a conservative approach of the bank, which is part of our DNA. We will definitely not be the most aggressive bank out there. This year, however, I expect our loan volumes to grow dynamically, and we will, at the same time, continue to prudently manage our risks. Now, a few words about last year's results and the key developments and events last year. It was a very good year when it comes to sales of investment products. The market grew, but we grew much more than the market, which is a good omen for the future when it comes to transactions.
Transactionality improved both in retail and in corporate banking and in our SME operation. I'm proud to report an 18% increase in the number of GOm obile business users, which shows that our mobile application for non-retail customers has won customers' acknowledgment and that customers are happy to use it. It's important to note that we improved our capital position. We were among the first issuers of AT1 instruments in the amount of PLN 650 million. Following the approval of the Polish Financial Supervision Authority, this amount was added to our equity, which improved the capital position of the bank. This makes us very optimistic about the future when it comes to our further growth.
As you will recall, last year, for the first time in the bank's history, we paid out a dividend at 50% of our net profits, and we plan to pay out a dividend this year as well at the same level. The management board has passed a resolution, and we are recommending this dividend payout. Looking forward, I want the bank to be a dividend-paying company. These are the first steps, but we hope to keep up this trend. Moving forward, a brief overview of the implementation of our strategy. Let me remind you that this year is the last year of the current strategy, G Obeyond. At the end of last year, we started drafting our new strategy, and we are working hard on it.
I hope by the end of the year, we will be able to present to you, our colleagues, the regulator, our new strategy for 2026-2030. Now, I don't have much to add on the different pillars of our strategy and our achievements. However, let me stress one point. It seems that the vast majority of our key strategic targets and objectives will be achieved by the end of this year. I also need to stress that we are focusing on ESG. The volume of our sustainable financing is growing. We have crossed the mark of PLN 10 billion last year. We have ambitious targets for this year and beyond, and we definitely want to remain a leader in sustainability financing, including support for the energy transition, which, as we all know, is a key part and condition of further development of the Polish economy. We improve automation.
We are using an increasing number of robots supporting our operational processes. We've also reported an increase in the number of use cases of AI used to improve our internal processes or to facilitate the daily work of our colleagues, something we will be focusing on. Regarding the together pillar, I need to stress at least two points. First, despite the continued optimization of our headcount at the bank, the NPS or the eNPS increased further to 27 points, a solid result which shows that our colleagues, our employees are willing to recommend us as an employer among their friends and colleagues. The other point is the share of women, the proportion of women on the bank's management board. We have the Women on Board Directive, of course, and we implemented part of this directive ahead of time.
The proportion of women on the bank's management board is 37.5%, and on the supervisory board, 45.5% until the next AGM. We will definitely make sure that the proportion, the gender balance in the key areas of the bank is maintained and that we definitely ensure a fair distribution and division of the key roles. This is something we believe in. It's not just a matter of directives or regulations. I honestly believe that the more diversified our teams, the more creative they are, and the more interesting perspectives, the better our performance and our results. Some charts reflecting some of our metrics. We've seen some growth in the number of customers using digital channels, although we'd like to see even more growth there.
Regarding the users of G Omobile, the growth was more pronounced and a solid growth in transactionality as measured by the number of BLIK transactions made by our customers quarter by quarter. Now, let's look at sales. Again, some charts. You can see that when it comes to the growth rate of sales of personal accounts, we definitely need to speed up or step up the % outcome. It is not yet fully satisfactory, but we see some positive trend here with solid sales of products and high growth in sales of investment products. As I've mentioned, the number of GO mobile payments has grown. With regard to retail customers, this shows that this platform or tool has won general approval. We see the biggest numbers when it comes to mortgage loans. Enormous % increase, but please recall that the base was low.
Yet, as I said, the bank was gaining momentum month after month so that by the end of the year, we reported solid growth, which makes us very optimistic for the future. In corporate banking, we did not report a significant number in growth in the number of active customers, which suggests that some clients, for some reasons, may be related to the risk profile, terminated their relationships, but we won new valuable clients in their place. Transactions improved.
In this context, I would like to mention the part of the bank that we call CIB, which is Corporate and Institutional Banking. It is difficult to translate into Polish. It is a component of our activity which reflects our group's focus on the group of the largest clients, while at the same time providing more complex and sophisticated products. I am very happy to see, and once again, I apologize in English, mandated lead arranger for two offshore farms construction transactions that were implemented so far. It is of key importance for us as we are talking about the energy transition here. In both cases, we were the coordinator of the hedging transactions.
The transactions we offer to our largest clients become increasingly sophisticated, but risk mitigation is gradually greater because the risk to sponsors of the project is the increase in prices of individual commodities, which translates into prices of key components to be installed in those projects. So now, just a snapshot of important, if smaller, transactions in corporate banking. You can see those on the slide. Now, if we look at the graphical representation of what I've already mentioned, I told you about the marginal decrease in loans. We have slightly reduced our market share. I have already explained that the main mechanism behind it is our delayed compared to the rest of the market activity in the area of individual mortgage loans, retail mortgage loans. As for deposits, we have a solid growth, which is perfectly satisfactory.
As I've already mentioned previously, we are not participating in the deposit race. We try to make sure that the structure of the deposits is good and that they are economically justifiable for the bank. The number of clients is important because, as you see, nominally, the number was reduced, but we have intensified the processes of cleaning the database, the purging the database, the clients that were not active for a long time, the clients who did not react to our requests and repeated offers. We simply part ways with such clients. Keeping them on a database does not make sense economically. They do not bring any income to the bank, but they do contribute to regulatory requirements related to such buzzwords as "know your client" and provisions and so forth.
Therefore, the value of those clients is, in fact, zero, just to avoid saying that it is negative. I'm not saying that everybody who has once become our client wants to continue working with us. The good news is that in the retail banking subsegment of affluent clients and wealth management clients, we note regular, steady growth of the number of clients who want to work with us actively. Now, a brief overview of results. I have already mentioned most, if not all, of these values. What is worth emphasizing for 2024 is that in each of the four quarters, we had a solid, reproducible level of income, solid level of profitability. This means that our last year's result that was very good was achieved in a methodic, stable, and predictable way. I have already mentioned the cost of risk, including the cost of legal risk.
I hope that at this level we will see a declining trend in the cost of risk. But of course, you know, let us not pretend the Swiss franc saga is not over. It will stay with us for a while. How long? Well, that's the question for those who have crystal balls and know how to read them. Key financial indicators. I would like to mention the cost-to-income ratio. Here we have a somewhat positive trend without regulatory costs. The cost of credit risk, so far I was talking about it without naming numbers, but as you see, we are below 30 basis points. I encourage you to look at reports of other banks to find out just how attractive this level is. I have also mentioned the ROE. It exceeds the cost of capital, which is extremely important to our investors.
Here, once again, we have a graphic representation of the numbers: 6.5% growth in revenue. I have already talked about that, and I talked about the composition of that growth factor. As you see, regulatory encumbrances and legal risk impact is significantly lower than in the last year. Net profit at the level 133% higher than last year. That concludes the first introductory part of our presentation. Thank you for your attention so far. I'll be back. I mean, I'm not going anywhere. I'll stay here, but I will take the floor again. Now, I give the floor to Isabelle Mateos y Lago , the Group Chief Economist of the bank.
Good afternoon, ladies and gentlemen. The end of last year was definitely better in the economy than the summer and autumn period. The economy has accelerated.
There was over 3% growth, although we have to be very frank and say that it is still driven mostly by consumption expenditures. Beginning of the year seems to look better, and it looks like the economic growth is compounded by investments, and the investments will remain the factors that will drive our economy in the coming months and quarters. A very important inflow of EU funds last year and this year and probably in following years will translate directly into a much higher level of equity investment in the economy, and via multiplier effect, it will contribute to economic growth, albeit indirectly. Many things we don't know yet, although they are important from the perspective of the economic environment of our country and Europe. There is still a lot of uncertainty with regard to tariffs or potential risk of a trade war with the United States.
Certainly, however, we get much more positive messages from Europe regarding an important portfolio of expenditures to improve infrastructure in Germany, among others. If it is implemented, there is a chance it would be supporting our economy as well. Inflation will certainly not be a problem for the accelerating economic growth. Inflation nominal value is high, but we know that it stems from increased indirect taxes last year and increase in prices of energy and administrative prices. We do not see the true inflationary pressure in the economy. The base inflation dynamics is clearly slowing down, and for now at least, there are no signs of that trend reversing, no reason to expect for it to happen.
We expect that the beginning of next year we'll see a return of inflation to that target, including the CPI, and therefore the economic premises to relax the monetary policy of the central bank will become increasingly important and apparent. They will certainly translate into the good decisions regarding the nominal level of interest rates. I do believe that one result or one outcome of reduced interest rates will be reduced pressure on PLN appreciation, which was worrying our exporters over the past several weeks as it was not favorable to their profitability or profitability of export sales. Finally, outlook for our industry or the banking sector: improved climate and potentially lower interest rates mean higher demand for loans.
Recent months seem to bring somewhat better trends in terms of loan production and volume growth, although we have to remember that this is a process that is pretty much only starting, especially in the corporate segment. It has not stabilized, and it is not uniform across various industries. So we will probably have to wait a bit for it to happen. Thank you very much, and back over to you. Good afternoon. Ladies and gentlemen, 2024 was a very good year for the bank financially, both in terms of the financial result and in terms of strengthening the balance sheet for yet another year. I would like to point out a number of pertinent elements. Once again, our total assets have grown. The sources of financing have grown. It's yet another year when we see a gradual improvement in the structure of financing.
A final, very important element is that 2024 was the year during which the capital position of the bank, equity position of the bank, was significantly strengthened, both through organic actions and by adding various capital instruments like AT1 to our portfolio. We have floated AT1 very successfully in the fourth quarter. As for the bank's liabilities and the deposits that the clients have trusted us with, combined with high interest rates, was the main driver for increase in revenues. Year to year, it has grown by almost 10%. I would like to point it out to you that it is the second growth component this year because we also had an increase in commissions, income from commissions that has grown by 4.4%. We are very happy about it.
Since, as my colleague has already mentioned, everybody expects a change in directions in terms of future interest rates and dynamics. The good dynamics in the area of commissions is something that we focus on very consciously. Another thing we should keep in mind with regard to 2024 is the dynamics of Swiss franc risk write-offs. We had a $6 million cost related to that, which encumbered the financial result of the bank, although somewhat less than in previous periods. The final element that I find very important as we look at our reports is the net interest margin.
This reflects our bank's capacity to raise funding and to use it to improve the NIM. 3.8% was the number reported for 2024, a significant part of our business model.
As regards lending, we've heard a lot about loans so far, so I only need to stress two points. First, throughout the year, the volume of the overall loan portfolio remained stable, which can be attributed mainly to mortgage lending, where at some point the bank decided to slow down the lending. Starting in Q2, as you heard during our meetings, we went back to the market, and then the growth rate, quarter after quarter, suggests that we are back. However, this should not be interpreted as our intention to be the mortgage lending leader, but we do not want to really see an attrition in our natural market share. Briefly about the Swiss franc loan portfolios, it would be perhaps best to sum up last year from two perspectives.
First, we see a decrease in the number of new Swiss franc loan court cases, which is not yet zero. We still see new litigation, but much less than before. Last year, the bank continued its initiative, encouraging clients to settle with the bank in order to close Swiss franc loan cases outside of the courtroom. Last year, we saw a decrease in the number of new court cases and continuation and good results of new settlements. Regarding the coverage of the portfolio with provisions, close to 156% looking at the carrying amount. When it comes to the hedging of the risk with the trends we see, we feel pretty comfortable. Customer deposits, I've said that in 2024, across all the market segments, we saw an inflow of cash.
We followed a very prudent pricing policy in order to participate in the growing overliquidity in the banking industry, while on the other hand making sure that our margins remain solid without overpaying for deposits. There's a lot of overliquidity out there, which means that from the economic perspective, there's no reason to boost further growth by means of pricing. One important part of our activity, especially from the perspective of customer relationships, is our ability to offer products that are alternative to deposits. We do not want to compete in price wars when it comes to customer savings, but we want to offer products which will address our customers' expectations regarding the expected return rates. This is clear in numbers, the increase in investments of our customers. This was yet another year of solid growth in our portfolios.
I've mentioned net interest income, so let me move directly to the net fee and commission income, which I think will become increasingly important in the lower interest rates environment, which is not to say that we are expecting a significant shift in the mix of our income, but in the income mix. But this element, NFC, will stabilize our future income base. We are very proud to say that there was a rebound, especially in Q4, in NFC commissions and fees on loans and cards in particular. So in Q4, we saw a good positive trend, hoping that in the coming quarters, the growth rate in NFC will remain solid, combined with the bank's strong balance sheet, a focus on new business and new acquisitions. I think this will help us to grow. Trading and investment income, we've seen several developments. You can see some dips, serious dips.
However, these were mainly related to large one-offs that we had reported in 2023. So there was a strong base effect when it comes to our core business. The margin on transactions with customers was strong with double-digit growth, despite the fact that the macroeconomic relationships were not favorable. Last year, volatility in the market was low, so the transactional business in that market environment was not performing exceedingly well, but we remained in a position to offer specialized products to our customers. Our strong positioning allowed us to report good results in this market segment as well. Another important point in this component was the overliquidity in the economy investments, which made a positive contribution to our P&L. Expenses, the cost position. It's important to recall that the bank's cost position is well under control, in my view. We are still working under inflationary and wage pressures.
We are managing them by taking a range of optimizing initiatives, including to rationalize the headcount on the one hand, while on the other hand, we continue our digital transition, our investments, which shows in the P&L through growing depreciation charges. We want to keep our cost growth rate close to the market average, and this is what we did. I think this is a good result, and quarter after quarter, we will be working to improve our cost base. Additionally, I'm proud to draw your attention to the growth rate of income and costs last year, which were pretty much equal, which shows that we are taking care to keep balance between the two. Good afternoon. In 2024, we closed the year with provisions of 246 million zlotys, which is less than 30 basis points.
It was pretty much the same in Q4 2024, and I'd like to note that this happened despite the fact that we had one major impaired loan in corporate banking. I also note that all the other corporate loans, retail loans, and consumer loans performed very well, and the customer's capacity to repay the debt remained solid. What we did on top of that in Q4 was we looked at several segments, especially those with exposures to the German economy, for instance, the automotive industry with a lot of exports, or the furniture producers, or white goods producers, and we applied stress tests to them, as we did to segments with loans for investments in real estate, in properties. As a result, we set up provisions of nearly $100 million. Despite that, the final cost was less than 30 basis points. These provisions did not really materialize.
Importantly, these provisions were estimated against potential future losses. Now, looking at the quality of our portfolio, you can see that impaired loans in stage three increased in Q4, mainly related to the single impaired loan in corporate banking. But in Q4, the recoveries restructuring was solid enough to go back to a ratio of 3.2%, and the full volume of impaired loans remains well below 3 billion zloty. Now, if you look at the different stages, these are very stable: stage one, stage two, stage three. I just want to stress one point. If you look at the increase in stage two, especially for institutional clients, the increase between Q2 and Q4 was from 11.5% to 12.5%, but that is not due to any deterioration in the quality of the portfolio. This is because we stressed some customers from some portfolios in specific industries.
As we stressed those customers, we had to downgrade the rating and put them in stage two, whereas they continue as ongoing concern, and they keep on repaying their loans. Thank you.
Ladies and gentlemen, now capital position. I talked about it a lot, so let me focus on two elements. One of them is what we disclosed in financial statements. 2024 was the CRR3 implementation years, and the impact of regulatory change cost our bank something over 3 billion zlotys in risk-weighted assets, which translates into 53 basis points of total impact year to year. That's one. We did have those estimates in our equity plans, so this change did not generate any unexpected encumbrance of the capital requirements account of the bank. The second very important element, as Mr.
The President has already announced at the beginning, the bank wanted to and did deliver a dividend second year in a row, or we will recommend payment of a dividend. We will pay the dividend in the amount of half of the financial results, which is PLN 7.68 per share. The dividend will be paid on May 9th. Ladies and gentlemen, we are coming to the end of the presentation. Thank you for your patience so far. I won't take much of your time. We live in interesting times and times of uncertainty. If we look at Polish economy, there are clear reasons for optimism. The growth is expected to exceed 3%. We hope for increased dynamics of investment based on EU funds, among others. We see that the economy is showing more and more demand for financing. All those are positive phenomena.
The world, however, is a complicated place these days, and what is going to happen on various axes? What will happen on the line between EU and China, U.S. and EU, and so on? There is also uncertainty related to the war in Ukraine. We do not know if it is going to end, in what conditions, and how durable that peace would be. What I was concerned about recently was a return to populist narrative, and it was delivered by politicians that I would not expect it from. The narrative was once again, "Oh, the banks are making so much money, and oh, their margins are so high." I took the liberty of responding to that in the media because this entire situation shows us two things. First, lack of understanding for basic rules of the financial market, even among very distinguished politicians.
It also shows that the banks have become this easy target, the whipping boy, and various politicians are trying to increase their political capital, raise their political capital by attacking banks. So it would be important. I mean, I would appreciate it if media representatives wrote about banking in Poland in a fair way, free from hate speech. If they would show how the banking was evolving over the past 30 years, what a high level of service and technology we offer to our clients, and how we can behave in situations that require mobilization, like we did during the COVID-19 pandemic, when without the highly mobilized and efficient financial sector, distribution of aid funds would not be easy. We hope that the politicians' whimsy will not lead to dangerous situations that we were dealing with in previous years.
We hope that everybody will understand that given the enormous investment needs that we are facing, energy transition, strengthening the defense sector, further digitization, Poland needs strong, efficient, well-capitalized banking sector. As for competencies and goodwill, it is truly on a very high level in Poland. What we are going to focus on is first dynamic acquisition of valuable transactional clients for each of our market segments, with focus on the retail segment. Secondly, active participation in energy transition. It's a business we're familiar with. We are present in all the larger projects and also a number of smaller but relevant projects. We do have competencies in that area. It is part of our DNA, and I am convinced that we can play a very important role there. The area is large enough that there is room for multiple banks in it.
I'm sure that we will see banks joining forces because it would be easier to finance important projects together than to compete against each other for them. We are fully open to finance defense industry as well. We are asked about that quite often. Let me state it once again in a perfectly clear manner. We are open. We are ready. We do have such clients in the portfolio. We have loan and off-balance exposure in that portfolio. We are ready to be more active. Of course, we will expect from the clients from that industry and all the others, but this one in particular, we will expect fairness and transparency because defense industry is somewhat specific. It has certain special features. We will not be involved in projects that will support the defense capacity of Poland, EU, and Ukraine military capacity.
We will continue to cooperate with our clients, mostly in terms of post-sales service. A lot remains to be done in that area. We will continue our digital transformation. The level of investment implemented by the bank is significant and will remain so. It's not that we have to fill the gaps like we did five, seven years ago. Now, we are mostly thinking about becoming an increasingly efficient bank in terms of internal processes because improved efficiency, reasonable cost management, rational cost management is one of our priorities. In total, despite the global uncertainty, I am optimistic about the current year and coming years. I do believe in Polish entrepreneurship, Polish economy, and I deeply believe that Polish politicians, at the end of the day, will employ rational thinking and that the entire banking sector and our bank in particular will be able to develop in a harmonious manner.
I wish that to ourselves and our shareholders. Thank you. This concludes the presentation part, and we move on to the Q&A session. Let's display a nice slide just so you see who you can get in touch with at any time if you have additional questions. Do we have any questions in the room? Let's start with these. Good afternoon, Adam Sofuł. I wanted to ask you to elaborate on the topic of Swiss francs. What percentage of clients have received settlement proposals? Was it all of them? The second thing, there are 13,000 proposals, 5,000 settlements, 6,000 agreements. The remaining 7,000, are those rejections or just being considered by the clients? Could you please quantify that a bit? As for the numbers, you have quoted them yourselves. As for the process, the settlement process is iterative and very individual.
As you read the numbers that the bank is publishing, please keep at the back of your mind that it is usually not one conversation that results in case being closed. So these numbers, especially if you compare quarter to quarter, these numbers could have gone a different way. So you cannot just mathematically subtract one from the other and get a black and white picture. We work with our clients. We listen to what is happening in the market. Like I said, there are many returns, many recurrent meetings, many discussions. So it is very difficult to show this number arithmetically. As for further steps, the only true thing that I can say is that the bank is not stopping these actions. We still believe that settlement is better than litigation, and we try to convince our clients to settle amicably with the bank.
13,000, 14,000 proposals were sent out. What percentage of your portfolio is it? I can't tell you that right now. I don't know. I would like to ask about three things. First is the priority indicated by the president for this year, acquiring new clients. Are there any specific projects or initiatives planned to serve this purpose? What number of new clients would you believe to be a natural level or satisfactory level for the bank for the year? By the way, as you talked about commissions, it was indicated that closing an account bears a commission income. Did I understand you correctly? Could you please elaborate a bit? The second question, you have mentioned that this is the beginning of your path of dividends. Does it mean that dividend from profit for this year? No, let me rephrase.
Does it mean that the dividend from profit for the past year, the seven, eight, what is, should be considered exceptional in terms of amount, or is it possible that next year the level would be similar? In other words, do you expect, are there chances that this year's profit would be similar or greater than the profit for 2024? The final thing, do you calculate the green assets ratio? If you do, what is it? Let me start, if Piotr permits, and then Piotr will finish. We calculate the sustainable financing ratio to loans in total, and it was over 17% at the volume of $10.2 billion at the end of the year.
As for client acquisition, it is a difficult question in that I'd rather not divulge the ideas that we have and that we are going to implement, but I am going to discuss the ones that we have implemented so far or continue to implement. The flagship idea that was very surprising for the market was the 8% offer. I think a quarter ago, somebody asked me about it, and I was explaining that it doesn't say that we want to gain extra liquidity for 8%. No, that was the offer that was intended to bring potential clients to our banks. The 8% can be only gained in our brick-and-mortar branches, where first of all, we convince the clients to open an account, and secondly, we persuade them to expand their cooperation with the bank.
Another example of a non-standard approach is our tennis card, movie card, and angler fisherman card. We have a number of other solutions. This is not standard for the market. We have other ideas, and we will continue to implement other solutions, but we are very determined to grow the number of our clients.
How many customers would I like to attract? This question is hard to address. I'd like our customer base, especially including the more active transaction clients, to increase, but don't be surprised if quarter after quarter, we report a decrease in the nominal number of customers due to the cleaning up of our database. There was another question about commission income, I think, that I forgot. I mentioned the sustainable asset ratio, customers, profits, yes.
The fact that we're embarking on this road, this will be the second year that we have paid out, that we will have paid out dividend in our history. I'd like to continue this tradition. As I said, I want the bank to be an attractive dividend-paying company. But as we all know, we do not publish any forecasts of our key financial parameters. So your question about this year's profit, whether it will be same, higher, lower than last year, with all due respect, I cannot answer that question. Dzień dobry, Ekonomista.pl. Ja mam takie pytanie. Economist PL, I have a question about the sectors you enumerated. You said you're interested in the defense industry to work with them. Question. There's not much defense industry in Poland. What other sectors potentially do you think would be a good fit for you?
Which sectors could grow in Poland at this point in time this year with the current circumstances? The context was different. I enumerated those three sectors not because we think they are our favorite sectors. However, Poland will have to make biggest investments in these industries. That's clear. The energy transition, hundreds of billions of zlotys of capital expenditure in the years to come, at least half of which will originate from banks. That's a fact. The defense industry, we have heard that expectations regarding the spending on defense in relation to GDP, the expectation is it will grow. We are performing quite well, but President Trump says 5%, so probably we'll see investments grow in all the EU member states. There may not be a lot of projects, but some interesting projects are in the pipeline.
There are a lot of foreign trade transactions in that regard of balance sheet instruments. And then there are companies in the defense industry which require some revolving facilities and investment facilities as a consequence. So this looks very interesting as a sector, and its importance is growing. But we are a universal bank with a lot of SME, corporate, and CIB business. So to use the English term again, we are very much industry agnostic. There are some sectors we don't want to work with, tobacco or coal-fired energy generation, but in other sectors, we are very active and interested to grow our client base, our relationships, and our competencies to grow. Let's move on to questions asked online. What is the ratio of long-term funding, the long-term funding ratio, and the sensitivity of NII to changes in the interest rates?
Let's go back to your question that Piotr was supposed to address, commission income. Commission income generated when we close down a customer relationship, that depends on the type of product that the customer had with us, depends on the terms and conditions of such products. When closed, we generate income depending on the product, credit card, or other. When the bank reviews and cleans up the database of borrowers, we close down individual facilities, and then depending on the type of product contracted with the client and depending on the terms and conditions of the product, this generates income reported by the bank. Let me add on a more philosophical note. It's not that we are building our future based on commission income from accounts that we close. What's more important is the recertification of customers who are not responsive.
That generates costs, and it makes no sense for us to keep such clients as they generate expenses. Now, on the question about the long-term funding ratio, the bank complies with the requirements with a safe buffer, and in the near future, I think this will not be a problem for the bank regarding the SOT /NAI ratio. As of December 31st, it was 447. Another question, Łukasz Janczak, Erste. What growth rate of total expenditures are you expecting in 2025? Another question. In 2025, what is the expected cost of handling litigation? CHF 117 million, that was the number in 2025. I think it's about CHF loans. Regarding the first question, overall, in aggregate, when it comes to the cost base, we don't want the cost base to grow above inflation, which is a big challenge.
This year is going to be the first year in a long time that we are expecting regulatory fees to increase. That's because the total guaranteed deposits in Poland are growing, and so the charges will also have to grow. On the second question, Swiss franc loans, our expectations are closely correlated with the number of new court cases. In the baseline scenario, we don't expect this number to grow. We're expecting lower numbers, in fact. So in proportion, the costs of such litigation should also be lower. Next question, Konrad Krasuski. Your new strategy, will it focus once again on ESG? Given the current changes in global paradigms, are you thinking to shift the focus? Let me be clear. Our focus on ESG will remain as strong as ever before. This is our commitment and our responsibility. It's part of our DNA.
We are rather concerned seeing reverse trends, especially across the ocean, across the pond. But I hope after dialogue with our shareholders, the banks in Europe will be more responsible. Next question, Janusz Kot. What is the expected cost of AT1? Let me take this question. The answer is simple. This is not something we would disclose publicly. Next question, Trigon. What could be the impact of the new regulation, the CRR, on the capital ratios in 2025 and beyond? I think I covered that in my presentation. So to recall $3 billion of additional risk-weighted assets, 45 basis points of impact. 2025, could this be the last year where you incur costs of your CHF loan portfolio? What is the target of quarterly sales of mortgage loans? That's the second question. Let me take that.
We've seen a downtrend, as Piotr has clearly mentioned, but I would be too optimistic to expect that this year will be the last. Although I would say that the impact of this risk factor on provisions and related costs will be declining steadily. Next question, what is the target of your quarterly sales of mortgage loans? Right. This question is forward-looking. We do not publish or disclose our plans or sales targets. All I can say is, if you look at Q4 2024, that positive number would be rather satisfying. TFI PZU, what is the expected reduction or cut of interest rates this year and next, in your view? When inflation comes close to the target, 2.5% on a permanent basis, it would seem rational for the real interest rates to be no more than one percentage point.
The target in the inflation cycle of this inflation cycle should be around 3.5% in my view. Question is, how soon are we going to get there? I am quite optimistic about inflation. I think inflation will hit the target or about the target in the second half of this year, definitely next year. But when it comes to the interest rates, these are decided by the central bank. The response function of the Monetary Policy Council does not seem to be stable over time. The target of 3.5%, which seems economically reasonable and rational, may take more time to be reached after inflation comes close to the target. But I wouldn't think it will take more time to hit the target. More than two years, not more than two years. Another question, TFI PZU, what is your take on the risk of the free credit sanction?
Well, who knows what future will bring? For now, the value of the disputes concerning the free credit sanction is immaterial. If I remember well, we've set up provisions of about 1 million zlotys. 90% of cases resolved have been adjudicated by courts in favor of the bank. One last question, Michał Majerski, Pure Alpha Investments. The drop of ROE to 16.9% as compared to more than 18% in previous years, combined with a drop in the cost of risk. Don't you think this means that the bank's capital position is exaggerated so the payout ratio could be more than 50% in the coming years? I know I shouldn't comment on questions, but our ROE was never 18%. If it had been 18% or more in the past years continuously, then we would all be toasting with champagne and enjoying our success.
Let me recall you that ROE in 2023 was 8.2%, which was much lower than the cost of capital. One last question. Is it possible for the main shareholder to reduce its stake over the next 12 months? If so, how much? Let me say this. To the best of our knowledge, our majority shareholder has committed to increasing the free float to 25% plus one share in the future. The time horizon for this is not strictly defined. This could happen this year. It could happen later. So this, in fact, means how much or what percentage of the majority shareholder's stake would be sold if the bigger free float is achieved by a sale of shares by the majority shareholder, because there are other ways to do that. This concludes the list of questions. Thank you.
On behalf of colleagues, thank you very much for your participation. All the best, and I hope to meet you again next quarter.