Good afternoon, everyone. We're happy to be back. We're back as promised, with the release or presentation of our new midterm strategy called Millennium 2024 Inspired by People. Our performance today, you know very well, but for those who are new perhaps, and for cultural reasons, I would like to present Mr. João Brás Jorge, who is our Chairman of the Management Board and CEO, and he will be hosting or presenting most of the presentation. With us, we also have Mr. Fernando Bicho, Deputy Chairman of the Management Board and CFO.
Before I hand over, I have to play a role of a bad cop, so I have to basically flag the fact that there is a disclaimer in our presentation, and it's inherent part of the presentation and of our strategy. Whatever we say today and whatever is written there should be read within the context of the disclaimer. Thank you very much. João, over to you.
Thank you. Good morning or good afternoon, everybody. It's my pleasure to present the strategy for the bank for the years of 2022, 2024. Maybe we can go directly to page five. Millennium is known and seen for years as having clients in the center of our thinking, our working, our solutions, and is with them that we are always working together what we are going to do. Now we went a little bit further, and we complement this as with internal view and insights. The strategy that we present, it's truly inspired mainly by our people.
This is interesting because also in the format that you see always in the strategy, we do market research, we do benchmark, we see the new trends in terms of technology. This time, the internal debate and the internal view was the source of the big part of the inspiration of the strategy. The pillars that we are presenting for this strategy are from one side, the top quality and instant offering that we present to individual clients. Our aim to become the first choice in new micro businesses, to have the role of strategic partner supporting the corporate development. All of that supported by innovative solutions and top-notch of customer experience with a mobile-first approach.
We aim to be a sustainable organization on the climate neutrality path and to maintain our position as a great place to work for our people and also for the acquisition of top talents. In slide 6, we can see even an illustration of this inspiration by our people. I could not say it better about these new trends as Piotr, a colleague of us that joined Millennium through the Euro Bank acquisition and that is a manager in terms of customer experience team. As he says very well, with more remote channels to serve, it is extremely important to find the balance between humanity and technology. Go online, but stay human. This is exactly what we are doing. In slide 7, we present in brief our target in this strategy.
From one side, we plan to continue to increase in numbers of active clients with a target to reach 3 million customers in 2024, driven by keeping the top quality and by being a market leader in terms of NPS, continue to growing our scale with 30% growth in assets, maintaining this efficiency and profitability that we want to do. With aim to achieve or to move from 40% cost to income to 37% cost to income. Of course, this cost to income, net profit, and return on equity without the Swiss francs costs. In terms of profitability, to move from PLN 1 billion of net profit to PLN 2 billion in net profit in 2024.
In terms of return on equity, to move from 9.5% to 14% in 2024. In digitalization terms, to go to 90% of digital customers in these 3 million customers and 80% of digital sales. In risk terms, to have below 4.7% of non-performing loans, to have in mortgage below 10% of FX mortgage as a percentage of total gross loans. In terms of people, to maintain the position of top employer in Poland. If we go to page 9, we can see the macroeconomic outlook that we are forecasting for these three years of this new cycle of strategy.
We are seeing a strong positive GDP growth forecast for Poland, and not only comparing to Europe, but also Central Eastern Europe, but also an environment with low unemployment and very high disposable income. All of that combine also with the very strong programs that help the development of companies, the green migration and this decarbonization of the economy. Page 10, we see these double engines that help the banking business in Poland because it's environment that not only the GDP is growing, as well as there is a catch-up in terms of penetration of the banking products. As we can see from mortgage to investments to corporate lending, we still have a potential of doubling the business comparing to the GDP if we use as a benchmark the western Europe levels.
From the right side, we can see our forecast for the net banking income of all the sector, and we see a potential of growth of more than 40%. On page 11, we see that the digitalization of our business have been supporting our cost efficiency. As you can see, we compare well with our peers, even in the case of bigger peers. As all of us know, bigger banks means also an easier way of being more efficiency due to dilution of costs. On the right, we can see the very strong trend that we are having in terms of digitalization of our customer base and also the business. If we go to page 12, we can see that even during the COVID, we keep building conditions for creating this efficiency.
As Weronika, a Manager in our Administration and Infrastructure Department, says, "Well, we took advantage of COVID times by speeding up the office space modernization in headquarters, providing space that support this hybrid work." It is also during this statement we explain how we are not only improving the conditions, but by that, also reducing the costs and being more efficient. On page 13, we explain how we, as digital innovators, also maintain this focus on quality and also the needs of the customers. Because during our way of being and during our exercises, we research and check the needs of the customers and understand these needs, following why shape better customer experience and better emotions when banking. Also through technology and cybersecurity allow us to support the digital transformation, but keeping the customer's protection.
Of course, we are helping to have the changing of the process by fully adjusting to digital and omni-channel all the transactions, but also the sales processes. On the right side, we can see how we are keeping the very strong capacity to have customer services and the focus on quality by the high NPS that we have in the banking system. On page 14, we see a definition done by Celina, our colleague in contact center, that says that, "Working with clients is the essence of our bank. We treat each client individually. We want to address her, his needs and expectations in a personalized way." This capacity is exactly what help us to leverage what we see in page 15.
On page 15, on the left, we are presenting the dynamic changes that we are seeing in the banking business. 60% of the customers declared using digital channels for banks. Generation Z, which is the digital native customers, are entering the banking market. Quality and convenience are a top reason for selecting a bank. 70% of the customers are willing to pay more to retain sustainability, and personalization is with the biggest impact in terms of bank recommendation. On the right, we see also our capabilities. As a top digital bank, always distinguishing with first place by Global Finance, and also how important is already the acquisition of Generation Z that is already bigger than 40% inside of our acquisition pools. As we already doubled versus 2020, the
Not double, but the increase in 70%, the growth of clients under 18 years old. How high is the NPS and our focus in quality, and how distinguished we are in terms of respective index and ESG. Also how 85% of our customers agree that proposed offers that they receive from our bank are suitable for them. Even in the digitalization of corporate, that already 50% of our customers are signing credit agreements digitally. In page 16, we present how successful we were in terms of strategically deploying two new areas in the previous cycle, we were already very strong in terms of customer acquisition, in terms of service quality, and in terms of digital banking.
We were able to maintain these positions as we are saying, but also we were able to develop the consumer loans and mortgage. In that time, we presented as a strategic initiatives to have these two capabilities, and we can see now that we move from 3.5% of market share in consumer loans, new sales, to 8.5%. In terms of market share in new mortgages, we move from 5.7% to 12.2%. The bank now was able already to have these two new engines of growth.
On page 18, we present the two areas of the bank that we need to focus, because at the same time we have, from one side, the main business of the bank with PLN 791 million of net profit in the first three quarters. This is a very healthy and profitable business. At the same time, we have a FX mortgage legacy book that is having a very bad impact in the bank. PLN 200 million as legal costs plus negotiations and settlement costs, and PLN 1.4 billion of provisions for legal risks. Addressing the FX legacy book, on page 19, we demonstrate that we have been focused in reducing the FX mortgage size.
In 2021, the annualized reduction pace of FX mortgage portfolio in Swiss franc terms exceeds 17%, while the weight of the portfolio is already close to 14%. We are aiming and estimating that it will be 7%, 7.2% in 2024, which means that meanwhile, we'll break 10% threshold. In page 20, we see our strategy on the FX mortgage legacy book from one side to maintain the conservative approach, trying to reach settlement with the borrowers. As we can see already in the second and third quarter, we already had more settlements than new lawsuits against the bank. Also, maintaining the legal defense of the bank positions, defending the validity of the agreements, and protecting the bank in case of declaration of invalidity.
From a third point, a regular assessment and update of the provisions from legal risks. As you can see, the coverage of the bank is already bigger than the peers. The three targets that we have for this strategy is reduction of the share of the mortgage in Swiss francs in the total loans to below 10%, to maintain the pace of successful negotiations in the next 12 months, and the main financial impacts to be reflected by 2023. On page 21, I think it very well addressed by Grażyna that leads the team that is handling these negotiations, that what we are doing in terms of settlements.
The project of negotiating mortgage loan settlements into Swiss francs involves tens of thousands of contacts with the clients each month through all the available channels. These are often extremely long talks leading to find the best solution. Currently, over 100 negotiators are in talks with our clients. If we go to page 22, we can see just the three main topics or areas where we are putting our strategy. In terms of retail, is mortgage, cash loans, and investments. In microbusiness is acquisition, improvement of the value proposition, and revamp of lending. In corporates is reengineering of the credit process, utilizing EU funds and green financing and leveraging on digital solutions. On page 23, we can see in terms of revenues what is our plans in terms of revenues for the total bank.
Our goal is to increase in 50% the total revenues of the bank from PLN 3.5 billion to PLN 5.2 billion, and with that, increase our share in terms of the capture of the total revenue pool of the banking system from 6%-6.5%. In retail, we want to move from PLN 2.7 billion to PLN 4 billion, and this is a 50% increase. This will put us in a market share of total revenues of retail banking business in Poland of 8.4%.
In microbusiness, we want to increase 100% in the revenues that we are collecting from this segment, from PLN 194 million to PLN 385 million, and incorporate a 35% increase from PLN 591 million to PLN 802 million of revenues in the segment. During this period, we will also make a change in terms of our services, and there is, of course, a kind of a silent revolution in the services of banking at the moment. As you can see in page 24, this is very well described by our colleague Barbara, that is the Head of Branch here in Warsaw. She says, "Every day at our branches, we introduce hundreds of our clients to the world of mobile banking.
We help them to install our application, activate access to the internet account, and complete the first transactions." This is exactly what is being done. It's very important to see, for example, in page 25, that in the left, that 33% of the digital customers were enrolled to digital during COVID. There is needs to have this capacity to understand the transformation, but also they have the branches to making the digitalization and the onboarding of our customers.
Our goal, as it is shown on page 25 on the right, is that we will move from 80% of digital clients to more than 90%, maintaining the 99% of the transactions being done by digital, but moving from what is already a high level, so from 27% to 67% of sales done in digital to a level of on average to have 80% of our sales made in digital.
If we go to page 26, this is an illustration of the transformation in digital that we are having from a pure internet for making simple transactions and the mobile app to see the balance of the account to a situation that the major transaction and some of simple sales are done in the app to a process that digital have a major role, and the mobile apps are even using to more things like banking, even to pay parks or to apply to the government to public support actions and another of other activities. On page 27, our colleague Ernest is explaining how we are seeing this. As he said, we can see how the world and the customer expectations are changing. Today, our clients look for experiences, not products.
For many of them, bank stands for the mobile app that they are using every day. In page 28, we illustrate how we are also leveraging in the non-banking activity with our goodie platform, a discount and sales platform that we are having. The highlight that I would say as well is that as you can see, this year, the P&L breakeven point is reached, which is also always a very important milestone in this kind of innovative projects.
Page 29 also demonstrates how we are trying to close the loop in terms of the e-commerce and leveraging the explosion of the commerce that we are seeing in Poland by having installment loans, partnership with major retailers, and building a payment gateway and through a sector solution developed by BLIK to enter in the buy now, pay later business. On page 30 is just to highlight that we are keeping our work in terms of digitalization and in terms of personalization. Already in 2017, we were the first bank to bet on personalization. I'm sure that by being our clients, you know that we deliver it, and you know how we did it, and how we are doing it.
The only thing that I would like to highlight is the scale of the interactions that we are having at the moment. In 2018, in our mobile application, our interactions on a daily basis were 13 million interactions. Today is 130 million interactions. This shows the complexity, but also the need of the personalization that are needed to digital banking. Going now to the products, we have here in the page 31, a statement from our colleague Kasia Kowalczyk, that is the Head of the Retail Credit Underwriting Department, that explains that for our clients, the waiting time for a loan decision is next to the price and the amount, the most important element of choosing the mortgage offer.
On page 32, we are showing what we have been doing, and now we are being successful in terms of mortgage. It's exactly by understanding what was relevant in terms of the process of contracting a mortgage that we allow us to make all the improvements that make us to have the market share of, as it is expressed here, 12.2% in terms of new production without compromising the risk and also without competing in pricing. Today we are having in terms of stock already 9%, 9.3% of the market of mortgage in the PLNs. Our ambition is to keep growing, not only with the market, but even growing our presence in the market up to 2024.
On page 33, we can see our success in terms of consumer loans. In consumer loans, as you can see on the left, we move from 3.5% of the production to 8.5% of the new production. Our goal is to go up to 10% of the new production. With that, capture also around 10% of the profit pool of this product. Slide 34 is in investments, and here is an area that we want to grow more. We already have been successful in terms of digital sales. We already have 60% of our digital investments. In digital, of course, here is full digital plus the omni-channel sales that were closed in digital.
This make us very confident that we can go further in terms of the market share that we can acquire, and that we can make here a catch-up also in terms of penetration. Our goal is to move from the present around 6% market share, so 5.8, to 7.4% market share in 2024. Also in terms of penetration to go to the present penetration of 6.4% to 10% market share in 2024.
Of course, when we put here also the customer growth goal that we have, we were moving from 6.4% of 2.7 million customers to 10% in 3 million customers, which is a growth, not doubling the customers in investments, but almost doing that. In terms of page 35, we can see bancassurance. Today, Bank Millennium is one of the biggest players in terms of bancassurance, with 15% of market share in terms of the bundling insurance. Insurance for cash loans and insurance of mortgage, the property and life insurance. We will also initiate a process to sell standalone products to our customer base. Going now to micro and corporate business.
We can start with a statement from, in page 36, from our colleague Agnieszka. Agnieszka said the following: "The coming years will be a time of major change for entrepreneurs, resulting from accelerating digitalization and transformation towards a green economy." This is exactly one of the areas that we want to explore. Besides that, also the advantage and the need of digitalization for these segments. In page 37, you can see our targets for the micro business. For the micro business, it's important to say that we grew 54% in the previous cycle, in terms of number of customers. Now we have the target to grow 36% to 200,000 customers. Also, as you saw, we have the target of doubling the revenues in this segment.
We believe that we have space for that, because as we can see, when we benchmark the percentage of micro business revenues versus the total retail is only 7% in Millennium, and in the total banking business in Poland is 19%. If we go to the next slide 38, we can see also in terms of SME, one of the interesting change that is not only the acceptance, the usage, but also the importance of digitalization for this segment. As we can see here, today, 70% of SME users, the growth of active SME users of digital services is 70% versus the 11% in the previous years.
Also today, 70% of the customers declare that the digital functionalities have impact in their decision of the bank to choose. Before, just in 2019, this was close to 55%. Today, we believe that this can be an advantage for our bank. We can use digitalization for, first of all, revamp the credit process and to decrease the time to yes, without of course, impacting the risk profile. Also developing new facilities in terms of self-service solutions and improving the efficiency of the relationship managers that allow us to conquer a bigger number of customers and to leverage our position. On page 39, we have a statement from our colleague, Martyna.
Martyna is a corporate bank advisor in Poznań, and that says that, "For me personally, this means that in the coming years, I will have the opportunity to actively support clients in financing green investments." This is exactly the position that all of our colleagues are having in the corporate side for the green transformation of the industry that we are witness at the moment, and that we are forecasting for the future. We can see here in page 40 that we want to leverage the big size funds from European Commission, but also the national programs that we are having for the green transformation, and we want to capture our fair share, which is 55% in investment loans backed by European Union and by the state funds related to green finance.
Going now to page 41, our ESG ambitions. Let's start with page 42, with the statement from our colleague, Martyna, that is head of a retail branch in Gdańsk, but a very specific and special branch. As she said, "The bank has been using solutions supporting environmental protection for years. Moreover, we are proud of the fact that we are the first fully ecological branch in Poland." Exactly, this is a branch that we made as a pilot to be fully ecological branch, and that this know-how also we already used in the transformation of our head office in Wroclaw. In page 43, we can see our commitments in terms of environment.
Besides the bank that is already monitoring reporting and strongly reducing its own emissions over the last 10 years, and also that the bank already have a policy of non-financing new coal mining or coal-based energy, and even the existing exposures are close to zero. Even so, the bank made as a commitment for the year of 2022 to decrease 50% of the emissions versus 2020. To achieve climate neutrality by 2027 for the Scope 1 and 2, and for the full scope, so we also with credit, in 2050. Moreover, besides reduction of financing in polluting activities, also the bank commits PLN 2 billion to finance in sustainable and transformational projects. Going to page 44, we can show our commitment in the social part.
The bank have a very strong track record in terms of CSR, but we also want to state that in the future, the bank maintain the commitments to the customers to be customer focused on the customers in terms of quality, in terms of transparency, in terms of fairness, but also to be a bank without barriers as it is already today, and to be accessible to all the people, namely the people with disabilities. In terms of employees, our commitment to enhance and improve employee value proposition, and also our commitment in terms of self-education and training and adjusting all of that to the individual needs to our employees to help them to perform better, but also to help them to develop.
In terms of the community, we maintain not only our cultural initiatives, as over 30 years old tradition, but also we maintain our big commitment in terms of financial education, which have been one of our most visible activities, on supporting our community, but also support the employees in their social initiatives and in their voluntary actions for their own local environment.
Page 45, our commitments in terms of governance, and besides our strong position for more than 10 years membership in the top ESG indexes in Poland and the signature in terms of international agreements and ESG ratings, but also in terms of our commitments in terms of ethical approach to business with a regularly revised code of ethics and compliance assessment, and our commitments in terms of anti-financial crime measures in place to increase the transparency and the credibility of business relation with customers, and further developments and investments in robust anti-money laundering activities, and namely IT systems. But also consideration of climate and environmental risks, having sustainability metrics in our risk appetite statements and the climate risk assessment in our risk policies and stress testing. A final statement in page 46 from our colleague, Monika.
Monika is an expert in our recruitment team, and of course a person that is having one of our biggest challenge, which have been attracting and retaining talent. She states that, "Looking to the future, we believe that effective acquisition and retention of talent is crucial competence of the bank. We also want to keep taking care of the current employees, as their commitment determines our ability to achieve our ambitious goals." In the next slide, in slide 47, we can see that besides our very strong ranking and awards in terms of attractive and reliable employer, we want to keep developing our environment to attract top talents in terms of new ways of working, in terms of enhancing employees' value proposition and employer branding, creating these inspiring and empowering workplaces.
We are supporting the collaboration, innovation, and maintain our attractive development programs. Going to page 49, we have the last sum up, now in a little bit more financial and business and risk aspirations. We go back with the aspiration to move from PLN 1 billion to PLN 2 billion as a net profit without the Swiss franc impacts, return on equity from 9.5% to 14%, and cost to income from 40% to 37%. Of course, these two also without Swiss franc impacts. In the risk terms, we expect a normalized cost of risk of 50 basis points. We plan to maintain the non-performing loans below 4.7% and with 6% CAGR of loan book growth.
In business terms, it's 3 million customers, 90% digital active and 80% of digital sales, and with the FX mortgage to be below 10% of bank solo gross loan book.
Thank you very much, João. You did it in 40 minutes versus almost 50 minutes first time. Let's see if you get to 30.
No, this is the last one.
Okay. Now is the time for the Q&A session. Unsurprisingly, the vast majority of them relate to the financials and financial forecast, which is not a surprise given that last time when we presented our three-quarter results, we were somewhat hesitant to answer questions relating to the future because we wanted to actually address these at this very event. Before we give breathing space to João, maybe we start from the last question and which is more a general one, which is: What is the role of Bank Millennium in the strategy of BCP?
This is a good question for BCP. From all the discussions and from all the views is that this is the Bank Millennium is an important component of the business case for BCP due to the growth of the economy of Poland and also by the capacity of bringing some diversification for the portfolio. Today, BCP have three areas, Mozambique, Portugal, and Poland. They are all three very different, but from another side, they are all three very complementary. Sometimes, when one area is having a bigger crisis, like we are having at the moment with Swiss francs, is a time that the other areas are performing quite well.
When there was a bigger crisis in Portugal, there was a time that, for example, in Poland, we were performing quite well. The combination of these three geographies have been played well for BCP. Also it's a different way of operating, it's probably a group, but from another side, operationally quite independent. That allows also to have strong advantages in terms of flexibility, speed, and even not have sometimes these competitive disadvantage of being in a big group. This is what looks like at least in the perspective of that we see as a member of the group. More precise answer could be diverted to them.
That's a very diplomatic and very to the point answer. Thank you very much. Fernando, now the time is for financial questions, many of them. But let's start from the interest rate assumptions because they repeatedly show up here. From a very simple question, what is our interest rate trajectory? I think this is a good starting point to elaborate a little bit.
Before being more concrete, please, I would like to remind everybody that the preparation of a strategy is an exercise that takes several months and is based on some assumptions that need to be done. That somehow sometimes are adjusted in the middle of the process when new events come up. Still, what we are formulating is assumptions that we believe can be realized for the next three years, and not just looking at what is happening in the next three months. Regarding the scenario of interest rates, I would like to remind that when we started this exercise of updating the strategy back in September, the official communication in Poland was that interest rates were not going to change. Okay.
In the meantime, we have already two rate increases, and still the market is anticipating further increases. The scenario that we have used is shown on page 10, where we are showing the average WIBOR for the three-year horizon, which of course are now lower than the current levels. But again, we are speaking about the three-year ambition. We are not speaking about the second quarter of next year, NII or WIBOR or whatever, because this is not the most relevant for this exercise. The scenario is clear, is shown on page 10. Currently WIBORs are higher because of the expectations.
Again, we are still going through times of big uncertainty, so we cannot just extrapolate that the current levels or the implied levels on the yield curve are going to be the ones that will materialize during the next three years.
The next question that relates to interest rate assumption is, how much of the 50% plus targeted increase in revenues is driven by higher interest rates? Along with it, there's a handful of questions about our thoughts on NIM developments.
Of course, the scenario of higher interest rates that we are showing, of course, is very important to achieve the revenue targets that we are presenting. There is also another very important part which is played by the growth of volumes during the next three years, both on the lending and deposit side. We are also assuming a certain level of competitive environment, which of course is estimated for this one level of interest rates. Of course, if there are changes and also if there are changes in the expected performance of the economy, then there could be changes in the expected margins that could happen in the future.
In our base scenario, I don't want to be very precise, but around 50/50 is coming from interest rate increases, another 50% from the ongoing improvements and mix of our business. This would lead us to a gradual increase of the net interest margin, which should go up clearly above 3% through the next periods. Where exactly it will stabilize again is a factor of the combination of all these impacts in terms of final level of interest rates and also competitive environment. Clearly, we are anticipating a growth of the NIM on a sustainable basis from the current levels that we have shown of around 2.6% during the current year.
Now I said that regarding NII and NIM. Of course, NII will be the driver of the revenue growth, much more than fee and commission income. In fact, because it's also related to another question regarding our focus on investment products. We are continuing to do a big effort in terms of catching up on the level of investment products in our overall product mix. At the same time, we cannot ignore the fact that still we are going through an adjustment in Poland of the maximum management fees that can be charged in investment funds, which will continue to be lower next year, lower than this year.
We will have lower caps applying to the management fees, and so the volume growth is partially offset by the compression of the margins that can come from the investment management fee and commissions.
Thank you. Slightly moving away from interest rates, there are two questions which relates to our lending growth assumptions. One says, "Do you see impact on the lending growth from higher rates? How do you see competitive landscape in Poland across different loan categories? Do you think the current higher growth in PLN mortgages is sustainable for the bank?" Do you see corporate business developing? How do you see corporate business developing in your strategic period?
At the moment, it's like if you ask me now what is happening now, we are having a more impact in consumer loans. There is a kind of fear that lending or that loans are more expensive now, which is, of course, interesting because we are still not at the level of consumer lending prices that we were before COVID. But it is interesting not yet in mortgage. We do not see yet some questioning, some doubts of customers in contracting mortgage due to the pricing. In our view, not.
We see salaries with the evolution that we are forecasting, this will be still a very positive environment to have people buying their houses, making their mortgage, and going through that life cycle. We see that we have still space in terms of benchmark versus other countries. I know that it's sometimes the benchmarks, everybody tends to say, "Yeah, but here is different." It's always the same conversation in all countries. We know that in long run, we tend to go to the average. It's obvious that here there is a bigger penetration of consumer loans and lower penetration of mortgage. As time goes by and as the society is becoming more affluent, there will be a convergence for that.
In our models, we are forecasting still a very good development in terms of mortgage. Maybe we will have with more stabilization of the scenario of interest rates, because now there is still in the rates, there is a big expectations of increase of reference rate. Because of that, it's a little bit more difficult even to sell fixed rate mortgage and these kind of instruments. I think it's more a question of adjusting the mix than losing the potential of the product. In terms of corporate loans, it's obvious that we are making management in terms of risk-weighted assets at the moment. With the consumption of capital that loans are making, we need to be prudent.
We have still a lot of space, but the good management forces to have some selection of products, and even to the capital that is allocated to corporate to move from big exposures in syndicate loans that do not have big value added to a smaller transaction with SME customers where we have the full relationship, or to back some loans with guarantees that is possible to do, and by that, reducing a little bit profitability but consuming much less capital.
We are going to have this process for a while, but we are forecasting that after 2023, already with a more reversed position in terms of lower needs of capital to consume the provisions that we are doing and a different situation in terms of also weight of the Swiss franc portfolio in total books allow us also to start growing the credit exposure in corporate from 2024 to the years after.
Thank you. You partly answered another question about lending growth. It was while loan growth CAGR of only 6%, which is partly because we're going to reduce the high density RWA corporate exposure. The question also is whether this includes the accelerated FX mortgage amortization. The answer is yes.
Yes.
There's a handful of questions about our cost assumptions, whether in our cost-to-income ratio target of 37%, we assume any cost savings, whether this includes BFG charges.
In our cost to income ratio, what we did not include were the costs connected with the FX mortgage portfolio in this medium-term target. This is what we have excluded from the calculation. All the other costs are included. Namely, we are expecting a gradual increase in the contributions to the Bank Guarantee Fund. We are already expecting that in 2022, at least they will be at the level of 2020, or even potentially they can be even higher, but at least this is the minimum. We are expecting going forward double-digit growth of contributions to BFG each year. We embedded this estimation in our calculations. Regarding
What was the other question?
Cost savings.
Cost savings. We, as we already saw last time that we met after the third quarter, of course, we are living times of cost pressure as cost inflation in Poland, both on the staff costs and on the administrative costs. In 2021, we are able to show a nominal decrease of costs versus last year as a consequence of all the improvements that were done and measures that were taken last year, which translated into a number of relevant savings. For the next year, we do not anticipate the possibility.
Of course, we will still have some savings in specific areas, but overall, with the current level of inflation in Poland, of course, we are assuming that overall costs are going to increase next year, and our effort is going more to contain that with some offsetting measures rather. We do not think it's realistic to expect a reduction of costs in the near future.
Thank you. I think there was a little bit of, maybe not misunderstanding, but questions around our 14% ROE target and PLN 2 billion net profit. This is question from so...
I think sometimes we want to provide more numbers and then sometimes maybe they are not properly understood. I think that everybody understands what we mean by the target of having PLN 2 billion of net profit in 2024, excluding the FX mortgage related impacts. I think this is clear what we mean. We are excluding from that any additional provisions or legal costs or settlement costs that we may have on that year. This is the first thing. The second thing is that when we try to project an ROE for the year 2024, if we excluded the, let's say, the Swiss franc related costs from the numerator, we also excluded negative impacts from the denominator.
It's very easy that just you need to assume that when you look at the denominator, so the equity of the bank, that it's not being negatively impacted by costs connected with FX mortgage. In order to go from 1 to 2, we will also generate some results in the meantime that also we'll be adding to this equity, pro forma equity that we are using for the calculation, and that's how we reach this, let's say, round half number of 14% of return on equity. But again, what matters is we.
I think I'm just explaining the mechanics, how we calculate it, because it will be unfair to just say, "Let's use the results without FX mortgage costs on one side, but let's consider potential negative impacts on the equity on the other side," because this would, I think, not be exactly proper to know. So this is the way we have calculated these, let's say, big numbers for the year 2024.
Thank you. There is a handful of questions about our CET1 and our RWA assumptions, particularly in 2024 under the obviously strategic exercise planning.
I think what, apart from what was already said, what I can add is that first we are having ambitious growth, but also based on proper management of risk-weighted assets. We will have a combination. The driver of asset growth is going to be PLN mortgages, which at the same time are the less risk-weight-consuming capital-consuming product. At the same time, we are decreasing the FX mortgage portfolio in absolute and relative terms, and this reduction will lead us at a certain moment in time to below 10% of total loans. With this, we expect the elimination of the additional capital add-on Pillar 2 buffer that we currently have, which is around 2.89 percentage points.
Consequently, we will also be, let's say, releasing more capital to additional growth. Our projections always have embedded the safe and comfortable fulfillment of the minimum capital ratios through time, which also we know will be changing through time. This is the way we are projecting.
Sticking to capital, there were also a few questions about dividends. I can read one out loud. On newswires, I notice your expectations of no dividend payouts for the next 2 years. Does it mean no dividends from 2021, 2022 earnings? You don't rule out payout from 2023 earnings.
This year we have a loss, so there is nothing to say. What we said was that we would not have payment of dividends during the next two years, in 2022 and 2023. This is what we said during the conference with the journalists. Regarding 2024, you know, it depends on a number of issues, what will be the minimum capital requirements by that time, and what will be the impacts of the Swiss francs by that time. It, you know, it's just too far. It's too far.
Okay. Last but not least, no event of ours without Swiss francs will be complete, so there's a whole bundle of questions on Swiss francs. They basically center around expectations on FX mortgage litigation provisions and settlement costs over the next three years, how many negotiations we expect in 2022. Do you expect quarterly pace of provisions to date to continue until 4Q 2023? All around that.
Starting with the settlements and negotiations. We continue to have the ambition, at least during the next 12 months, to be able to keep the pace of successful negotiations. We are providing statistics about our successful negotiations. We still expect it to be able to show during the next 12 months continuation of this trend. Of course, we know that it's getting more difficult, but as we are going to show in the fourth quarter, still good numbers regarding settlements. But this we will show in the beginning of February. The second thing is that regarding additional provisions for legal risk, as we already stated several times, we have to reassess this every quarter and we will do it once again in the end of the fourth quarter.
Of course, we will need to again make additional adjustment in the level of the provisions. I'm not going now to elaborate if it is going to be higher or lower than the previous quarters because it's still too early to say. Moving to 2022, I think we still have a lot of uncertainties before us, which also can play a role in terms of determining the pace of amortization of provisions for the next quarters, including classifications from Supreme Court or European Court of Justice on one side and the inflow of court cases on the other side.
We are, if nothing will change in terms of trends, we will still continue to have a 2022 with further adjustments in the level of provisioning, but we are not able to say to give a level, because it still depends on many developments that are before us. What we expect is that as time goes by, even if we will need to continue to make provisions for additional provisions, as a percentage of the recurrent results of the bank, they will get lower. The improvement of the recurrent profitability of the bank will gradually cover more and more the potential provisions that we still may need to do through time.
This is our expectation, and that's why even on one of the pages of the presentation, we are saying that we expect major financial impacts regarding these to be recognized until the end of 2023.
Okay, thank you very much. I think we, broadly speaking, answered most of the questions. We must keep some unanswered because otherwise you will keep IR jobless, which is obviously not what we would love to see. More seriously, questions generally around, you know, Swissies, we, I think we've actually answered, if not this time, then in previous instances of our presentations. Therefore
Just the cost of risk maybe. Cost of credit risk.
Cost of risk. Right.
Because there's a question about our target of 50 basis points cost of credit risk despite higher rates and higher consumer loans versus the past. It's a good question. First of all, in 2021, we are benefiting from a better than average picture. We have had, during 2021, a clearly lower cost of risk. But when we are looking, when we are projecting this 50 basis points over time, it's based on some normalization of the cost of risk. Some of the positive impacts this year will not repeat in the next few years.
We are looking at the structure of our loan portfolio and the fact that a large part of the loan growth is going to be driven by mortgage loans, which tends to have a much lower average cost of risk than other products. Consumer loans, where we still will continue to grow, the portfolio will not grow at all at the same pace as mortgage loans in PLN . Although we are having a relatively high market share in sales of cash loans in terms of portfolio, the portfolio does not follow at the same speed as, for example, PLN mortgage. On the other side, we are also being selective in corporate lending.
Putting all together, that we are setting this target of having on average 50 basis points over total net loans. For the time being, we still are not putting too much impact from the recent increases of interest rates in this estimation.
Thank you very much. João, any desire for closing remarks? All right. In this case, if you feel that your question hasn't been answered or if you have more questions, you're obviously more than welcome to approach us, email or telephone. Otherwise, thank you very much for your interest, for your questions, your time. Since this is probably the last meeting with us before Christmas and the winter holiday time, then we wish you all Merry Christmas, Happy Holidays. Stay healthy as usual, keep distance, and we hope to see you or hear you next time in 2022 in early February. Thank you very much.