22/01/2024

December 2023 Monthly Report

Overview of the financial services sector – December 2023

At end-2023, there were 2,248,825 members of mandatory pension funds (MPFs). On an annual basis, the amount of EUR 1.3bn was paid into MPFs, i.e. 14.8% more than in the previous year. Total payments from MPFs amounted to EUR 299.2m, which was an increase of 6.1%. Annual Mirex returns strongly recovered in 2023, reaching 14.9% for category A, 10.2% for category B, and 4.0% for category C. Consequently, at the end of December 2023, net assets of MPFs amounted to EUR 20.2bn, rising by EUR 2.7bn, or 15.3%, relative to end-2022.

The domestic capital market recorded a valuation recovery in 2023, which was particularly pronounced in the stock market. The main stock indices CROBEX and CROBEXtr recorded a more significant annual increase in value of 28.0% and 32.9% respectively, the bond index CROBIStr also recorded an increase of 1.8%, while the bond index CROBIS recorded a decrease in value by 0.8%. In 2023, market capitalisation increased by EUR 6.5bn (+18.8%), reaching EUR 40.8bn at the end of December 2023, of which stocks amounted to EUR 22.9bn, bonds to EUR 17.9bn and ETFs to 24m.  Total turnover slightly decreased in 2023 (by 5.4%) and amounted to EUR 371.8m.

Total premium collected by insurance companies in 2023 amounted to EUR 1.7bn, of which EUR 0.3bn (18.4%) related to life insurance premium and EUR 1.4bn (81.6%) to non-life insurance premium. On an annual basis, the total premium collected in 2023 rose by 7.1%, and the amount of claims settled also increased (by 13.6% on an annual basis), reaching EUR 1.2bn.

Total net assets of 108 UCITS that operated at the end of 2023 amounted to EUR 2.3bn, representing an increase of EUR 123.0m (5.7%) compared to the end of 2022. The increase in net assets managed by the sector was contributed to by positive net payments, which amounted to EUR 78.5m on an annual basis, with the most prominent inflow of net assets recorded by funds categorised as "other funds" (EUR 270.6m), equity funds (EUR 49.1m) and money market funds (EUR 10.5m). In 2023, all categories of UCITS achieved positive business results. Average annual returns of individual UCITS categories in 2023 reached 22.9% for equity funds, 6.7% for feeder funds, 8.2% for balanced funds, 5.8% for “other funds” and 2.5% for bond funds.

PENSION FUNDS – DECEMBER 2023

At the end of December 2023, mandatory pension funds (MPFs) had 2,248,825 members, i.e. 6,924 (0.3%) more than in the previous month. Category B funds had 81.3% of all MPF members, while category A and category C funds had 14.2% and 4.5% respectively. In 2023, 87,428 new members joined MPFs, i.e. 4,3% more than in the previous year. Out of the 8,757 new members recorded in December, 8,556 (97.7%) were assigned by Regos automatically, while this share reached 97.3% (85,030 new members) in the entire 2023. Termination of membership due to retirement or death was recorded with respect to 1,833 insured persons in December, and to 17,654 insured persons on the annual basis, an increase of 10.8% relative to 2022. Total net contributions paid to MPFs in December amounted to EUR 111.9m (0.6% of net assets at the end of November). Total net contributions paid to MPFs in 2023 amounted to EUR 1.3bn or 14.8% more compared to the previous year. Total payments from all MPFs due to personal account closures reached EUR 35.4m in December (0.2% of net assets at end-November), dropping by 11.5% compared to the previous month. On an annual level, total payments from MPFs amounted to EUR 299.2m, increasing by 6.1% relative to 2022.

At the end of December 2023, net assets of MPFs amounted to EUR 20.2bn, rising by EUR 0.5bn (2.6%) relative to the previous month. Compared to end-2022, this is an increase of EUR 2.7bn, or 15.3%. Nominal monthly Mirex returns reached 2.5% for category A, 2.2% for category B and 1.5% for category C in December 2023. Annual Mirex returns reached 14.9% for category A, 10.2% for category B and 4.0% for category C, while annualised[1] returns since the beginning of MPFs’ operation stood at 7.2% for Mirex A, 5.2% for Mirex B and 3.3% for Mirex C[2].

At the end of December, MPFs’ bond investments totalled EUR 12.7bn (63.0% of total assets). The share of bond investments decreased by 0.6 percentage points on a monthly basis (0.5 percentage points on an annual basis). The share of equity investments in MPFs’ assets increased by 0.2 p.p. on a monthly basis, amounting to 22.0% of MPFs’ total assets (EUR 4.5bn). This is a decrease of 2.0 p.p. on an annual basis. Investments in domestic shares accounted for 13.7%, while investments in foreign shares accounted for 8.5% of MPFs’ assets. As regards other investment types, investments in investment funds reached EUR 2.2bn (10.7% of assets) at the end of 2023, which is a decrease of 0.2 p.p. relative to the previous month, i.e. an increase of 0.1 p.p. on an annual level. Investments in cash and deposits amounted to EUR 674.0m, i.e. 3.3% of MPFs’ assets at the end of December 2023, which was an increase by 0.4 p.p. on a monthly basis and a decrease by 1.6 p.p. on an annual basis.

At the end of December 2023, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.9% on a monthly basis, while the number of members of 21 closed-ended voluntary pension funds (CVPFs) increased by 0.7%, making the number of members of these funds reach 394,326 and 48,683 respectively. Total monthly payments made to voluntary pension funds (VPFs) in December 2023 amounted to EUR 42.2m (3.5% of net assets at the end of the previous month), increasing by 228.7% compared to the previous month. On the annual level, total payments made to these funds in the entire 2023 amounted to EUR 141.4m, increasing by EUR 10.9m (8.4%) relative to the previous year. Total payments made from these funds in December 2023 reached EUR 4.0m, rising by EUR 0.2m (5.01%) compared to total payments made from VPFs in November. Total payments made from these funds in the entire 2023 reached EUR 47.5m, decreasing by EUR 53.6m (53.0%) relative to 2022. Total payments from VPFs made due to retirement and other reasons accounted for 71.2%, payments made due to the change of fund reached 20.8%, while those made due to death accounted for 8.0% of total payments in December. As regards total payments made due to retirement, the amount of EUR 0.8m was paid in the form of lump-sum payments, EUR 1.4m was paid through a pension company (fund), while EUR 0.7m was transferred for payment to pension insurance companies.

In December 2023, net assets of VPFs increased by EUR 69.0m (5.8% on a monthly basis, i.e. 19.2% on an annual basis) and stood at EUR 1.3bn. Monthly nominal returns of VPFs ranged from 0.8% to 3.7% in December, while returns on an annual basis ranged from 3.4% to 16.1%. As regards the investment structure of VPFs, the largest part of the assets at the end of December was made up of bonds, amounting to a 53.9% share, followed by stocks with a 25.1% share and investment funds with a 10.0% share. The share of bonds in VPFs’ assets decreased on the monthly basis by 1.7 p.p., the share of investments in investment funds decreased by 0.6 p.p., while equity share decreased by 0.5 p.p. On the annual level, the share of bonds decreased by 0.5 p.p., the share of investment funds decreased by 0.2 p.p., and the equity share increased by 0.9 p.p.

INSURANCE COMPANIES – DECEMBER 2023

In December 2023, there were 14 insurance companies operating on the market. Their total premium collected since the beginning of 2023 amounted to EUR 1.7bn, of which EUR 0.3bn (18.4%) related to life insurance premium and EUR 1.4bn (81.6%) to non-life insurance premium. On an annual basis, the total premium collected in 2023 rose by 7.1%, with the increase in non-life insurance premium totalling 13.8%, and a decrease in life-insurance premium reaching 15.0%. The structure of the collected non-life insurance premium is dominated by motor vehicle liability insurance (35.5%), followed by insurance of land motor vehicles (18.2%) and other property insurance lines (9.9%). The amount of claims settled reached EUR 1.2bn, increasing by 13.6% on an annual basis. EUR 419.8m of this amount related to life insurance (a 1.5% decrease on an annual basis), while EUR 743.2m related to non-life insurance (a 24.3% increase on an annual basis). In the total amount of claims settled in non-life insurance, the largest amounts relate to motor vehicle liability insurance (38.2%), insurance of land motor vehicles (19.8%), insurance against fire and natural disasters (10.7%) and other property insurance lines (12.7%).

CAPITAL MARKET – DECEMBER 2023

The total turnover on the Zagreb Stock Exchange reached EUR 44.9m in December 2023, increasing by 9.9% on a monthly basis. Total turnover for the entire 2023 reached EUR 371.8m, which is 5.4% more than the annual turnover in the previous year. Market capitalisation increased by 3.2% in January 2023, and stood at EUR 40.8bn, of which stocks amounted to EUR 22.9bn, bonds to EUR 17.9bn and ETFs to 24m. On an annual basis, market capitalisation increased by EUR 6.5bn (18.8%) compared to the end of the previous year. CROBEXtransport stock index decreased by 1.0% in December, while all other sectoral indices increased, with CROBEXkonstrukt recording the highest monthly increase of 7.9%. The main ZSE stock indices (CROBEX and CROBEXtr) recorded a monthly increase of 4.0%. Bond indices CROBIS and CROBIStr also increased on a monthly basis, by 2.2% and 2.4% respectively. On the annual level, the highest annual rate of return of 56.1% was recorded by CROBEXindustrija, while the main stock indices CROBEX i CROBEXtr also recorded annual increase, by 28.0% and 32.9% respectively. In 2023, the bond index CROBIS recorded an annual decrease of 0.8%, while CROBIStr increased by 1.8%. PODRAVKA d.d. was the stock most traded in December, with its turnover amounting to EUR 5.9m (25.8% of the overall trade in stocks in December) and a 9.4% monthly price increase. The stock that recorded the largest annual turnover was also PODRAVKA d.d., which generated annual turnover of EUR 44.0m, with annual price increase of 93.7%.

INVESTMENT FUNDS – DECEMBER 2023

In December 2023, there were 108 UCITS operating on the market, 5 less than in the previous month. Total net assets of UCITS amounted to EUR 2.3bn at the end of the month, increasing by EUR 153.3m or 7.2% compared to the previous month. Compared to the end of the previous year, net assets of all UCITS increased by EUR 123.0m (5.7%). Total net payments of all UCITS in December were negative (EUR -118.4m). Positive monthly net payments were recorded by bond funds (EUR 89.9m), equity funds (EUR 19.7m), money market funds (EUR 6.9m), and funds categorised as “other funds” (EUR 5.9m), while negative monthly net payments were recorded by balanced funds (EUR -3.6m) and feeder funds (EUR -0.3m). Net payments to UCITS on the annual basis were also positive, amounting to EUR 78.5m. Broken down by categories, positive annual net payments were recorded by funds categorised as “other funds” (EUR 270.6m), equity funds (EUR 49.1m) and money market funds (EUR 10.5m), while negative annual net payments were recorded by feeder funds (EUR -13.2m), balanced funds (EUR -42.1m) and bond funds (EUR -193.3m). Bond funds’ net assets accounted for 40.5% of the total net assets of all UCITS at the end of December, while equity and balanced funds accounted for 15.8% and 11.6% of the total net assets of UCITS respectively. In December 2023, all categories of UCITS recorded positive asset-weighted average monthly returns, namely equity funds 3.3%, feeder funds 3.7%, balanced funds 2.3%, “other“ funds 1.6 %, bond funds 1.1% and money market funds 0.3%. Average annual returns of all UCITS categories were also positive, amounting to 22.9% for equity funds, 6.7% for feeder funds, 8.2% for balanced funds, 5.8% for “other” funds and 2.5% for bond funds.

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to EUR 146.4m (a 2.6% monthly increase), with the monthly return of the fund reaching 2.7%. On an annual basis, change in net assets of that fund amounted to 15.7%, while its annual return reached 16.7%.


[1] The annualised return is the geometric average of annual returns realised in the period observed.

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

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