August 2022 Monthly Report

Overview of supervised entities’ activities in the financial services sector for August 2022

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of August 2022, mandatory pension funds (MPFs) had 2,150,492 members, i.e. 10,038 (0.47%) members more than in the previous month. Category B funds had 87.2% of all MPF members, while category A and category C funds had 9.3% and 3.5% of all MPF members respectively. Out of 11,138 new members, 10,940 (98.2%) were automatically allocated by Regos. Termination of membership due to retirement or death was recorded with respect to 1,100 insured persons. Total net contributions paid to MPFs in August amounted to HRK 705.4m (0.5% of net assets at end-July 2022) or 1.1% more compared to the previous month. At the same time, total payments from all MPFs due to personal account closures reached HRK 156.3m (0.1% of net assets at end-July), dropping by 12.7% compared to the previous month.

At the end of August 2022, net assets of MPFs amounted to HRK 132.5bn, rising by HRK 165.1m (0.1%) relative to the previous month. Nominal monthly Mirex returns reached -0.2% for category A, -0.3% for category B and -0.5% for category C. Annual Mirex returns reached 0.5% for category A, -1.3% for category B and -4.1% for category C, while annualised returns since the beginning of MPFs’ operation reached 6.7% for Mirex A, 5.2% for Mirex B and 3.6% for Mirex C[1].

At the end of August, bond investments of MPFs totalled HRK 85.7bn (64.67% of total assets), making their share increase by 0.1 p.p. on a monthly basis. The share of equity investments in MPFs’ assets amounted to 20.4% of MPFs’ assets (HRK 27bn), an increase of by 0.1 p.p. on a monthly basis. Investments in domestic shares accounted for 12.4%, while investments in foreign shares accounted for 8.0% of mandatory pension funds’ assets. As regards other investment types, investments in investment funds amounted to HRK 14.1bn (10.7% of the assets), making the proportion of these investments in total assets decrease by 0.1 p.p. relative to the previous month. Investments in cash and deposits amounted to 3.5% of the assets, or HRK 4.7bn.

THIRD PILLAR PENSION FUNDS

In August 2022, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.4% on a monthly basis, while the number of members of 20 closed-ended voluntary pension funds (CVPFs) increased by 0.1%, making the number of members of these funds reach 366,135 and 46,739 respectively. Total monthly payments made to voluntary pension funds (VPFs) in August 2022 amounted to HRK 62.9m (0.8% of net assets at end-July), increasing by 17.5% compared to the previous month. Total payments made from these funds reached HRK 22.3m, decreasing by HRK 0.6m (2.8%) compared to total payments made from VPFs in the previous month. Total payments from VPFs made due to retirement and other reasons accounted for 76.2%, payments made due to the change of fund reached 18.7%, while those made due to death accounted for 5.1% of total payments in August. As regards total payments made due to retirement, the amount of HRK 4.7m was paid in the form of lump-sum payments, HRK 6.9m was paid through a pension company (fund), while HRK 5.1m was transferred for payment to pension insurance companies.

In August 2022, net assets of VPFs increased by HRK 21.1m (0.3% on a monthly basis) and stood at HRK 7.7bn. Monthly nominal returns of VPFs ranged from -0.6% to 0.2%, while returns on an annual basis ranged from -7.4% to -0.9%. As regards the investment structure of VPFs, the largest part of the portfolio was made up of bonds and amounted to a 56.4% share in total net assets, followed by stocks with a 25.1% share and investment funds with a 10.5% share. The share of bonds in VPFs’ investments decreased on the monthly basis by 0.2 p.p., the share of investments in investment funds stagnated., while equity share increased by 0.1 p.p.

INSURANCE COMPANIES

In August 2022, there were 15 insurance companies operating on the market. Their total gross written premium since the beginning of 2022 amounted to HRK 8.8bn, of which HRK 2.0bn (22.6%) related to life insurance premium and HRK 6.8bn (77.4%) to non-life insurance premium. On an annual basis, total gross written premium rose by 8.1% in the first eight months of 2022, with the increase in non-life insurance premium totalling 10.6%, and the rise in life-insurance premium reaching 0.4%. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (31.1%), followed by insurance of land motor vehicles (15.5%) and other property insurance lines (12.9%). The amount of claims settled reached HRK 5bn, increasing by 8.6% on an annual basis. HRK 2.2bn of this amount related to life insurance (a 13.3% increase on an annual basis), while HRK 2.8bn related to non-life insurance (a 5.2% rise on an annual basis). In the total amount of claims settled in non-life insurance in the first eight months of 2022, the largest amounts related to motor vehicle liability insurance (39.8%), insurance of land motor vehicles (20.3%), insurance against fire and natural disasters (8.2%) and other property insurance lines (10.2%).

CAPITAL MARKET

In August 2022, the total turnover on the Zagreb Stock Exchange reached HRK 97.5m, decreasing by 31.5% on a monthly basis. Market capitalisation increased slightly (by 0.5%) relative to the previous month and stood at HRK 263.8bn, of which stocks amounted to HRK 137.6bn, bonds to HRK 126.2bn and ETFs to 60.5m. As for stock indices, the largest monthly rise was recorded by CROBEXkonstrukt (10.5%), while CROBEXtransport recorded the largest monthly decrease (-1.8%). The main ZSE stock indices (CROBEX and CROBEX10) recorded a monthly fall, too (1.6% and 2.5% respectively), as did bond indices CROBIS (0.3%) and CROBIStr (0.5%). PODRAVKA d.d. was the stock most traded in August, with its turnover amounting to HRK 12m (12.9% of the overall trade in stocks in August) and a stagnation in value on a monthly basis.

INVESTMENT FUNDS

In August 2022, there were 93 UCITS operating on the market, one more than in the previous month, as a new fund categorised as “other” started to operate. Total net assets of UCITS amounted to HRK 16.8bn at the end of the month, decreasing by HRK 1.7m compared to the previous month. The positive sign of total monthly net payments into UCITS was retained and increased, with payments amounting to HRK 158.5m in August, primarily due to positive net payments made to UCITS belonging to the “other funds” category (HRK 107.8m). Negative monthly net payments were recorded by equity funds (HRK -22.4m), balanced funds (HRK -4.5m) and feeder funds (HRK -7.5m) while bond funds recorded positive net payments (HRK 85.1m). Bond funds’ net assets accounted for 66.3% of the total net assets of all UCITS at the end of August, while equity and balanced funds accounted for 12.4% and 6.8% of the total UCITS’ net assets respectively. In August 2022, all types of UCITS recorded negative asset-weighted average monthly returns, namely feeder funds -2.7%, equity funds -0.8%, balanced funds -2.0%, other funds -1.5% and bond funds -0.6%.

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 1bn (a 5.5% monthly increase), with the monthly return of the fund reaching 5.7%.

The full report is available at Publications/Monthly reports

[1] Beginning of operation: MPF category B: 30/4/2002; MPFs category A and C: 21/08/2014