As a result of that, if you look at what is in gray, we are in advanced discussions on the sale of our German consumer business and our Italian mortgage book, and this will complete our exit from European retail outside of the UK. We are also evaluating options for our UK merchant acquiring business, which I will talk more about later. So the first point was the five businesses. The second point is how do we think about each of these businesses? We are at scale in Barclays UK, we are at scale in the Investment Bank, and we are a scale in the UK Corporate Bank. Our focus is on improving each one of them. Some parts will need to grow and they will. In the Private Bank and Wealth Management space, we are very profitable, as we show you, but we need to scale further.
And in the US consumer bank, we are on a journey to scale while mentioning our specialist — maintaining our specialist focus, which must be more profitable. And that includes better management of capital and the lower cost to income ratio, and we’ll talk about that. Finally, why does this collection of businesses fit together? The way we think about it is either they have a UK focus and/or they bring synergies to the bank. For instance, if you take the US consumer bank, it has client synergies with the investment bank but also with our US cards capability as our Tesco mortgage — Tesco Bank transaction shows. And given that we have in that transaction entered into a partnership program, which is, in fact, the focus of our specialty business in the US.
Further, the US consumer business diversifies investment bank in the US stress test CCAR. Lastly, we’ve announced management changes this morning for our five businesses. They reflect both the promotion of the next generation of leaders for our important businesses as well as a rotation within Barclays to broaden the experience of some of our existing business heads. So Barclays UK will be run by Vim Maru, who ran the equivalent business at Lloyd’s, and we look to him to apply his experience with Barclays UK. The UK Corporate Bank will be run by Matt Hammerstein, my colleague who has run Barclays UK for over half a decade and is now ready to step into this new challenge. His deep experience in the UK makes him an opportunate and fit person to run this division.
Private Banking and Wealth will be managed by my colleague, Sasha Wiggins, who has served as both my Chief of Staff and managed our public policy effort most recently. She has her career anchored in our Private Bank before she ran our business in Ireland, and she brings the knowledge and the profile and the connectivity within the bank to achieve this ambition successfully. And our Investment Bank will be run by Adeel Khan as Global Head of Markets and Cathal Deasy and Taylor Wright, who remain Co-Heads of Investment Banking. Stephen Dainton, who co-ran Markets with Adeel, is appointed President of Barclays Bank plc and Head of the Investment Bank management. My colleague, Paul Compton, who’s been with us on the Executive Committee for eight years, will step back from his current role as Global Head of the CIB and become Chairman of Investment Banking, speaking and working with our most critical clients.
The US Consumer Bank continues to be run by Denny Nealon. These business leaders or all members of the Barclays Executive Committee, and they will report to me. So, that was the structure. Equally important in running the bank in a simpler way is how we operate them. We removed 5,000 roles in 2023. We are also repositioning about 30% of the people from our common platform, Barclays Execution Services, which we call BX. That’s about 20,000 people. And we are driving that — moving them into the businesses driving closer ownership, greater accountability, and speed of execution. We are focused on technology, which is a big driver of simplicity. 75% of our workload so far has been moved to the cloud with a plan to get this to 85% to 90%. We expect to decommission a further 450 to 500 legacy systems on top of the 400 that we have decommissioned to-date with a much greater focus in the future on buy versus build.
So, I said, first, a simpler bank and then a better bank. What does better mean? Having the simpler business means we can focus on delivering better performance for our customers and clients and as well as improving — delivering an improved financial performance for you, our shareholders. And we managed to do it in these ways. First, to better returns. As you have heard, we aim to deliver greater than 12% RoTE by 2026. To do that, we will continue to generate consistent high returns Barclays UK, the UK Corporate Bank, and Private Banking and Wealth, while investing more in these higher-returning businesses. At the same time, we aim to improve the investment banks RoTE from 7% in 2023 to be in line with the group target of above 12% by 2026.
And in the US Consumer Bank, we are also targeting an RoTE of for 2026, in line with the group. So, up from the 4% in 2023, and building back towards the levels of RoTE, which we have delivered previously. So, we are generating higher group returns by a combination of delivering higher returns from businesses which need to improve and allocating more core capital to businesses that have consistently generated higher returns, and we expect them to continue to do so. The second part of running better is to continue to invest selectively. We have spent £300 million on cost efficiency and revenue growth and protection in 2023, and this number is increasing to £500 million by 2026. And while we continue to invest selectively in the investment bank, the proportion that goes to consumer-facing businesses will grow to 70% and the absolute amount will double.
We are getting capital resources, as I said, and investment resources. Better income is not just higher income, but better quality income. And we aim to grow our total income to around £30 billion by 2026. Today, we already have a balanced mix of NII and non-NII, which is relatively resilient through rate cycles. But if you look at the bottom of this chart, you see two parts: retail and corporate and financing. We consider these two to be more stable income streams and they have grown by about 35% since 2021. And the proportion from these more stable income streams will be about 70% of the bank’s total income by 2026. This slide reflects the anticipated effect of the announced acquisition of Tesco Bank and the planned disposal of our German cards business.
Lastly, and very importantly to me, happy and satisfied customers are the sine qua non for any enterprise. And we need to improve our customer experience and outcomes. I mean, to illustrate this in the UK our Net Promoters Score ranked 8th among 12 leading banks. This is not good enough. We aim to improve the customer experience by investing in it deeply, and making it not just a point of focus, but a point of ambition and a point of pride. Our investments across all businesses are aimed at operational excellence and client satisfaction. As I said at the start, they are the same thing, and it’s the same side of one other side of the coin of financial performance. So we spoke about simpler. We spoke about better and we spoke now I’m going to talk about balanced bank.
And what does it mean? It means a more balanced allocation of RWAs with more capital deployed to our highest returning opportunities and it also means a more balanced geographical footprint, more concentrated in the UK and in the US. We will continue to add discipline on how we allocate capital both across the bank and within the businesses of the bank. Of the £50 billion which we now expect an RWA increase between now and 2026, we intend to allocate about £30 billion to our three UK businesses: Barclays UK, the UK Corporate Bank and Private Banking and Wealth Management. Now this includes the about £8 billion in RWAs in the Tesco Bank acquisition, which we announced 10 days ago. Of the £20 billion in RWA increases are allocated to the U.S. consumer bank, about £16 billion is driven by the changes in regulation that Anna spoke about earlier.
Investment Bank RWAs as I have said will be relatively stable and, in fact, shrink in real terms because they are absorbing — we are absorbing in the investment bank, the impact of Basel 3.1. Over the medium-term, this will rebalance RWAs between our consumer and wholesale businesses and will support more consistent and higher returns. As I have said, the investment bank is both very competitive and at scale. Our prior CIB construct accounted for about 63% of the group’s RWAs. The newly segmented investment bank accounts for about 58%. And as a result of the rebalancing of the group that we’ve announced today, it will reduce to about 50% by 2026. Further, as I’ll talk about later, we will recycle capital dynamically to the highest returning areas within the investment bank, and I’ll talk about that in the next presentation.
And we do that so that it can grow income without needing more capital, improving productivity and returns for the group. Taken together, all of this delivers a more balanced bank. Now, coming to geography, I said earlier that, we feel very confident in being a bank that operates in the UK and from the UK, and it is time to grow in our UK market. We have been UK-centered bank for 330 years. We are still transatlantic with an important presence in New York. But the UK is a great place to run a scaled banking franchise. The economy has remained resilient. The legal and regulatory environment is extremely strong and trusted. And for our international businesses, people want a UK counterparty. Taken together, operating out of London, we aim to be the UK-centered leader in global finance.
So in summary, we aim for stronger returns, greater shareholder distributions and operational excellence. They all go together. We will do so by having a simpler structure, better operation and financial performance and a more balanced business. So I repeat the words I said earlier. On the one hand, simpler, better, more balanced that’s the type of bank. On the other, we get there with our approach of being disciplined, consistently excellent in our operations and risk managed in a way that will deliver enhanced returns for our shareholders. So what I will do now is turn it over to Anna to talk through what all of this means in financial terms for our shareholders in more detail. Anna?
Anna Cross: Thank you, Venkat. As you’ve heard, our new three year framework sets out more ambitious financial targets, it’s going already, and meaningfully higher our shareholder distributions. I’m now going to take you through what underpins these plans. We start from a strong foundation, having delivered RoTE above 10% for three years now, excluding the structural cost actions taken in the last quarter. Our objective is to deliver RoTE above 12% in 2026 as we grow and generate further efficiencies. Along the way in 2024, we aim to deliver returns of greater than 10% whilst we reposition the organization and navigate the changing macroeconomic environment. Our plans to 2026 include the announced acquisition of Tesco Bank and the planned disposals of the German consumer business and Italian mortgage book, where we are in advanced discussions.
I do anticipate that these planned disposals will reduce RoTE in 2024. So on an underlying basis, I expect we’ll deliver around 10.5%, broadly flat to 2023. But this inorganic activity focuses our businesses for RoTE improvement beyond 2024. So in executing these plans, we are focused more on what we can control. And over the coming slides, I’ll talk you through the drivers of RoTE across income, costs, impairment and why we’re comfortable with the assumptions that we have made. But before I do though, I would like to cover the impacts from the cash flow hedge reserve on this slide. With a year-end value of negative £3.7 billion, it is currently a drag to tangible book value per share. As we expect its value to increase going forward, we’re confident that our tangible book value will increase from the year-end position of 331p per share.
And whilst mechanistically, it creates a drag on routing. It’s worth remembering that its movement — that movements in the cash flow hedge reserve don’t impact our ability to distribute capital. So, turning first to income. So what underpins our nearly £5 billion of income growth? First, a tailwind from our structural hedge; second, some reasonable assumptions in the investment banking wallet; and third, the deployment of RWAs into areas where we have a credible opportunity to grow. So the plan includes the capital effect of £30 billion of RWAs deployed into high-returning UK business, and we will focus that on areas where we are, frankly, underrepresented. For example, we’ve been traditionally been underweight in high-value mortgages. Our acquisition of Kensington provides us with the capability to expand in specialty mortgages and drive higher margins.
In our UK corporate bank, our ratio of loans to deposits is very low and much lower than our peers. In UK cards, we have lost ground and aim to recover it. And clearly, the acquisition of the Tesco business accelerates and secures our plans in this respect. As a reminder, we hedged the return from rate-insensitive deposit balances and our equity, and in doing so, we smooth our income profile through rate cycles, reducing interest rate risk. Given that we are at the point in the cycle where rates may have peaked and are now expected to fall, it acts as support and stabilizer. We have around £170 billion of hedges maturing over the next three years at an average yield of 1.5%, significantly lower than current swap rates. The expected NII tailwind is significant and predictable.
£8.6 billion of aggregate income is already locked in over the next three years. And in addition to that, reinvesting around 3/4 of the £170 billion at current swap rates would compound over the next three years to increase structural hedge income in 2026 by £2 billion versus 2023. Turning now to the assumptions that underpin our investment bank. Venkat and the Adeel are going to take you through how we plan to improve our RWA productivity and reallocate capital within the investment bank overall to generate higher income and returns. But it’s very important to us that our growth in the investment bank is driven more by the execution of our own initiatives than by the market wallet. So we are not assuming that the market wallet returns to the highs of 2020 and ’21.
In fact, our plans assume that the market’s wallet is broadly flat to 2023, and the investment banking wallet reverts to the 10-year average from last year’s decade lows. Going forward, we do expect higher income from the investment bank. Of course, managing costs is at the heart of what we control, and I’m now going to explain how both the efficiency programs and the changing shape of our investment spend deliver a more efficient and profitable bank. I gave a breakdown of our structural cost actions earlier. And to date, we’ve used efficiency savings to offset inflation. Now we expect these to more than offset inflation, bringing us capacity for business growth. The first £1 billion of savings lands in 2024, including payback from around half of the Q4 structural cost actions and a further £1 billion of cost efficiencies is expected through to 2026.
And it’s really important to stress that the efforts will not end there but continue to benefit our businesses beyond that point. We would expect in our business growth cost to flex in line with income. So overall, we’re targeting a cost-to-income ratio in the high 50s by 2026, improving from 63% in 2023. Given the income target of £30 billion by 2026, we’d expect costs to be higher in absolute terms versus 2024 at around £17 billion. So spend on regulatory change has been very intense in the run-up to Basel 3.1, and we anticipate that this will peak in 2024 and then fall to a more normal level as material projects complete. This will give us the capacity to invest more in income growth, efficiencies and returns without increasing our total investment spend.
