February 2023 Monthly Report

Overview of supervised entities’ activities in the financial services sector for February 2023

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of February 2023, mandatory pension funds (MPFs) had 2,187,513 members, i.e. 3,673 (0.17%) more than in the previous month. Category B funds had 85.0% of all MPF members, while category A and category C funds had 11.01% and 3.9% of all MPF members respectively. Out of 4,447 new members, 4,292 (96.5%) were automatically assigned by Regos. Termination of membership due to retirement or death was recorded with respect to 774 insured persons. Total net contributions paid to MPFs in February amounted to EUR 95.6m (0.5% of net assets at the end of month). At the same time, total payments from all MPFs due to personal account closures reached EUR 11.5m (0.1% of net assets at the end of January), dropping by 31.8% compared to the previous month).

At the end of February 2023, net assets of MPFs amounted to EUR 18.0bn, rising by EUR 116.8m (0.7%) relative to the previous month. Nominal monthly Mirex returns reached 0.8% for category A, 0.2% for category B and -0.6% for category C. Annual Mirex returns reached 3.4% for category A, -0.1% for category B and -3.3% for category C, while annualised[1] returns since the beginning of MPFs’ operation stood at 6.6% for Mirex A, 5.0% for Mirex B and 3.2% for Mirex C[2].

At the end of February, bond investments of MPFs totalled EUR 11.3bn (62.5% of total assets), making their share increase by 0.02 p.p. on a monthly basis. The share of equity investments in MPFs’ assets increased by 0.4 p.p. on a monthly basis, amounting to 21.4% of MPFs’ assets (EUR 3.9bn). Investments in domestic shares accounted for 12.7%, while investments in foreign shares accounted for 8.7% of MPFs’ assets. As regards other investment types, investments in investment funds amounted to EUR 2.0bn (11.4% of their assets), making the proportion of these investments in total assets increase by 0.6 p.p. relative to the previous month. Investments in cash and deposits amounted to 3.6% of the assets, or EUR 641.7m.

THIRD PILLAR PENSION FUNDS

At the end of February 2023, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.2% on a monthly basis, while the number of members of 21 closed-ended voluntary pension funds (CVPFs) decreased by 0.2%, making the number of members of these funds reach 376,348 and 47,630 respectively. Total monthly payments made to voluntary pension funds (VPFs) in February 2023 amounted to EUR 8.7m (0.8% of their net assets at end-January 2023), decreasing by EUR 1.3m compared to the previous month. Total payments made from these funds in February reached EUR 5.6m, rising by EUR 0.8m (17.8%) compared to total payments made from VPFs in the previous month. Total payments from VPFs made due to retirement and other reasons accounted for 74.2%, payments made due to the change of fund reached 19.2%, while those made due to death accounted for 6.6% of total payments in February. As regards total payments made due to retirement, the amount of EUR 1.7m was paid in the form of lump-sum payments, EUR 1.3m was transferred to pension insurance companies, while EUR 1.1m was paid through a pension company (fund).

In February 2023, net assets of VPFs rose by EUR 3.6m (0.3% on a monthly basis) and stood at EUR 1.1bn. Monthly nominal returns of VPFs ranged from -0.9% to 1.0%, while returns on an annual basis ranged from -4.7% to 3.4%. As regards the investment structure of VPFs, the largest part of the portfolio was made up of bonds and amounted to a 54.1% share in total net assets, followed by stocks with a 24.3% share and investment funds with a 10.2% share. The share of bonds in VPFs’ investments increased on the monthly basis by 0.5 p.p., same as the share of equity investments, while the share of investments in investment funds increased by 1.3 p.p.

INSURANCE COMPANIES

In February 2023, there were 15 insurance companies operating on the market. Total paid premium, which Hanfa started to disclose from January 2023, in the first four months of 2023 amounted to EUR 258.3m, of which EUR 48.1m (18.6%) related to life insurance premium and EUR 210.1m (81.4%) to non-life insurance premium. The structure of the paid premium of non-life insurance is dominated by motor vehicle liability insurance (35.1%), insurance of land vehicles (17.2%) and insurance against fire and natural disasters (10.0%). The amount of claims settled in the first two months of 2023 reached EUR 172.2m, increasing by 10.7% on an annual basis. EUR 71.7m of this amount related to life insurance (a 10.7% increase on an annual basis), while EUR 100.5m related to non-life insurance (also a 10.7% rise on an annual basis). In the total amount of claims settled in non-life insurance, the largest amounts relate to motor vehicle liability insurance (43.6%), insurance of land motor vehicles (21.7%), insurance against fire and natural disasters (5.1%) and other property insurance lines (9.9%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached EUR 21.7m in February 2023, increasing by 10.2% on a monthly level. Market capitalisation increased by 2.8%, relative to the previous month and stood at EUR 35.7bn, of which stocks amounted to EUR 19.8bn, bonds to EUR 16.0bn and ETFs to 8m. As for stock indices, which were all positive, the largest monthly rise was recorded by CROBEXtransport (17.7%), while CROBEXnutris recorded the smallest monthly rise (0.8%). A monthly increase was also recorded by the major ZSE stock indices CROBEX (5.5%) and CROBEX10 (3.4%), while bond indices recorded a monthly decrease, namely CROBIS (-0,6 %) and CROBIStr (-0,4 %). SPAN d.d. was the stock most traded in February, with its turnover amounting to EUR 3.0m (14.7% of the overall stock trade in February) and a 7.3% monthly price increase.

INVESTMENT FUNDS

In February 2023, there were 100 UCITS operating on the market, one less than in the previous month, in the category of equity funds, where one fund was merged with another. Total net assets of UCITS amounted to EUR 2.1bn at the end of the month, decreasing by EUR 77.0m or 3.6% compared to the previous month. Total monthly net payments of all UCITS amounted to EUR -76.6m, primarily due to large negative net payments into bond funds (EUR -72.6m). Negative monthly net payments were also recorded by balanced funds (EUR -1.5m) and funds categorised as “other” (EUR -4,5m). Positive net payments were recorded by equity funds (EUR 2.0m) and feeder funds (EUR 7 thousand). Bond funds’ net assets accounted for 59.1% of the total net assets of all UCITS at the end of February, while equity and balanced funds accounted for 13.8% and 6.8% of the total UCITS’ net assets respectively. In February 2023, only equity UCITS recorded positive asset-weighted average monthly returns, while other types of funds recorded the following returns: balanced -0.3%, bond -0.5 %, feeder -0.7%, and funds classified as “other” -0.9%.

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to EUR 136.8m (a 4.1% monthly increase), with the monthly return of the fund reaching 4.1%.

The full report is available at Publications/Monthly reports

[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