In ’23, our strong asset quality and robust approach to risk management resulted in low provisions for new defaults combined with effective recoveries. In addition, we saw a significant reduction of our Russia exposure, resulting in a release of provisions taken in 2022. Total risk cost in Wholesale Banking amounted to minus €92 million for the full year and the total risk cost for the bank amounted to only €520 million or 8 basis points of average customer lending. All in all, a very benign year in terms of risk costs. And we are vigilant as the cost of living and doing business increases for our customers, but we remain confident in the quality of our loan book. Slide 11 shows the development of our CET1 capital ratio, which strengthened from 14.5% to 14.7%, while we returned €6.4 billion to shareholders.
Increase in CET1 ratio was primarily driven by our ability to generate capital. And in addition, RWAs decreased, driven by disciplined capital management and a better overall profile of the loan book. Our fully loaded CET1 SREP requirements decreased year-on-year, driven by an announced 50 basis points reduction of the a lower Pillar 2 requirements. And these increases were only partly offset by higher countercyclical buffers, which increased by 34 basis points. And as a result, the buffer to both our target ratio and the regulatory requirements increased, positioning us well to continue providing attractive shareholder return. And more on that on the next slide. As already mentioned, we returned [indiscernible]. We returned €6.4 billion to shareholders in 2023, consisting of almost €3 billion in cash dividends and slightly less than €3.5 billion of completed share buybacks.
At the end of ’23, €0.5 billion of the latest share buyback still needed to be completed. And the share buybacks have a structural impact on the earnings and dividends per share, and we have already repurchased more than 14% of shares outstanding since our first buyback in 2021. Given our strong capital position and market-leading profitability, we are well positioned to continue providing attractive returns. Then starting from Slide 14, we show some key developments in the fourth quarter. And as these are mostly in line with the developments for the full year, which I just presented, I will focus on the highlights only. Total income was again strong and increased compared to last year, driven by higher liability NII and other income. Compared to the third quarter, our total income decreased.
However, most — mostly due to a negative swing in reserves in financial markets and lower investment income as the previous quarter had included the annual dividend from the Bank of Beijing. The ECB decision to adjust the remuneration on the minimum reserve requirement to 0 basis points had an impact of €69 million on NII. The decrease of liability NII was only limited. The higher cost for retail deposits was almost fully compensated by the positive impact from reinvesting of our replicating portfolio at higher rates. And more details on the development of our margins are shown on Slide 15. Net interest income, and I’m now at Page 15. Excluding the impact of TLTRO increased slightly year-on-year, liability margins and liability NII were still at much higher levels than last year.
And this was partly offset by lower NII from treasury and financial markets, reflecting the impact of accounting asymmetry — between the impact of accounting asymmetry between NII and other income. In lending, the margins stabilized after having increased by 1 basis points for three consecutive quarters. This stable margin, combined with higher volumes, resulted in a small increase of our lending NII. Our overall net interest margin for the quarter decreased by 3 basis points to 154 basis points, mostly driven by the lower ECB remuneration. Slide 16 shows the development of our — growth was mainly visible in Australia and the Netherlands from commercial performance of Business Banking in Belgium. In Wholesale Banking, we saw a small increase in net core lending, although demand was still subdued, and we continue to optimize our capital usage.
Going forward, we expect loan demand to pick up. Although uncertainties remain, given the heightened geopolitical and macroeconomic uncertainty that are outlined at the beginning of this presentation. We’re confident that our business model and geographic diversification positions us well to capture growth opportunities when they arise. And on to liabilities, we saw core deposits decline by €900 million in the fourth quarter, which was fully driven by Wholesale Banking, reflecting seasonal outflows mainly related to [indiscernible] . Core deposits in our Retail Bank increased, although we continue to see some shifts from deposits to assets under management, most notably in Germany. Then Slide 17. In the fourth quarter, operating expenses, excluding regulatory costs and incidental items were up on both comparable quarters, and this increase was mostly due to high inflation, but it was also driven by higher marketing expenses and continued investments in our business.
Regulatory costs were slightly up year-on-year, mostly including a higher annual Dutch bank tax, which is always fully recorded in the fourth quarter. And then we go to risk costs on Slide 18. Risk costs were €86 million in this quarter or 5 basis points of average customer lending. In Wholesale Banking, risk costs were [indiscernible] 1 and 2, which included the impact of improved macroeconomic forecasts and further active reduction of our Russia exposure, which came down to €1.3 billion at the end of the year. The risk costs in Retail Banking included a previously announced €21 million addition for Swiss franc indexed mortgages in Poland. Looking at the various stages, our Stage 3 ratio was stable with limited inflows and significant releases due entirely by the implementation of a new methodology for interest — the mortgage portfolio continues to perform very well with low payment arrears.
As I mentioned in my introduction, I will share our perspective on the outlook for 2024. It’s good to highlight again that the world around us continues to be uncertain, which limits the visibility on important operating drivers such as interest rates. The cycle of recent Central Bank rate hikes has paused and the market expects some rate cuts in 2024. And if this happens, it will have an impact on our liability NII in particular. In the scenario illustrated on this slide, we assume a gradual normalization of liability margins to around 100 basis points at the end of 2024, meaning that the average liability margin would be around 10 basis points lower than last year. Given our deposit base, customer deposit base was €625 billion. This would lower the liability NII by around €600 million.
The decrease in this scenario will be partially offset by a higher lending NII. As indicated, we do see initial signs of recovery of loan demand across the bank. And if this would indeed materialize into loan growth of 4%, our lending NII would increase by over €200 million, assuming stable margins. As explained on our previous slide, we were remunerated on the ECB minimum reserve requirement until September ’23, and that benefit will no longer be there in ’24. And in that scenario, [indiscernible] Slide 20, our NII would amount to €15 billion to €15.5 billion in 2024, lower than in ’23, but still significantly above the level of 2022. That’s on Page 21, which we aim to grow by 5% to 10% in 2024. As indicated before, the development of our fee income in ’22 end in 2023 was impacted by the lack of loan demand and lower trading volumes in investment products.
