July 2023 Monthly Report

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of July 2023, mandatory pension funds (MPFs) had 2,210,659 members, i.e. 6,741 (0.31%) members more than in the previous month. Category B funds had 83.3% of all MPF members, while category A and category C funds had 12.4% and 4.3% of all MPF members respectively. Out of 8,298 new members, 8,107 (97.7%) were automatically allocated by REGOS. Termination of membership due to retirement or death was recorded with respect to 1,557 insured persons. Total net contributions paid to MPFs in July amounted to EUR 109.9m (0.6% of net assets at the end of June). At the same time, total payments from all MPFs due to personal account closures reached EUR 28.5m (0.2% of net assets at the end of June), decreasing by EUR 2.4m compared to the previous month.

At the end of July 2023, MPFs’ net assets amounted to EUR 19.2bn, rising by EUR 268.5m (1.4%) relative to the previous month. Monthly Mirex returns reached 1.8% for category A, 1.0% for category B and 0.2% for category C. Annual Mirex returns reached 9.0% for category A, 4.0% for category B and -0.6% for category C, while annualised^[1] returns since the beginning of MPFs’ operation stood at 7.0% for Mirex A, 5.1% for Mirex B and 3.2% for Mirex C^[2].

At the end of July, MPFs’ bond investments totalled EUR 11.8bn (61.7% of total assets), making their share decrease by 0.6 p.p. on a monthly basis. The share of equity investments in MPFs’ assets increased by 0.3 p.p. on a monthly basis, amounting to 22.1% of MPFs’ assets (EUR 4.2bn). Investments in domestic shares accounted for 13.2%, while investments in foreign shares accounted for 8.9% of MPFs’ assets. Investments in investment funds amounted to EUR 2.2bn (11.5% of the assets), making the proportion of these investments in total assets rise by 0.2 p.p. relative to the previous month. Investments in cash and deposits amounted to 3.3% of the assets, or EUR 636.2m.

THIRD PILLAR PENSION FUNDS

At the end of July 2023, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.3% on a monthly basis, while the number of members of 21 closed-ended voluntary pension funds (CVPFs) decreased by 0.7%, making the number of members of these funds reach 384,307 and 47,913 respectively. Total monthly payments made to voluntary pension funds (VPFs) in July amounted to EUR 8.2m (0.7% of their net assets at end-June), decreasing by EUR 0.4m compared to the previous month. Total payments made from these funds reached EUR 3.2m, decreasing by EUR 0.1m (4.3%) compared to total payments made from VPFs in the previous month. Total payments from VPFs made due to retirement and other reasons accounted for 67.8%, payments made due to the change of fund reached 25.8%, while those made due to death accounted for 6.4% of total payments in July. With respect to payments made due to retirement, the amount of EUR 1.1m was paid through a pension company (fund), the amount of EUR 0.7m was paid in the form of lump-sum payments, while the amount of EUR 0.6m was transferred for payment to pension insurance companies.

VPFs’ net assets increased by EUR 16.4m (1.4% on a monthly basis) and stood at EUR 1.2bn. The monthly nominal returns of VPFs ranged from 0.2% to 2.1%, while returns on an annual basis ranged from -0.3% to 9.9%. As regards the investment structure of VPFs, the largest part of the portfolio was made up of bonds and amounted to a 54.5% share in total net assets, followed by stocks with a 26.3% share and investment funds with a 11.6% share. The share of bonds in VPFs’ investments decreased on a monthly basis by 1.1 p.p., the equity share rose by 0.5 p.p., while the share of investments in investment funds declined by 0.3 p.p.

INSURANCE COMPANIES

In July 2023, there were 15 insurance companies operating on the market. Their total gross written premium collected in the first seven months of 2023 amounted to EUR 1.0bn, of which EUR 173.2m (17.3%) related to life insurance premium and EUR 829.9m (82.7%) to non-life insurance premium. The structure of the collected non-life insurance premium is dominated by motor vehicle liability insurance (35.6%), followed by insurance of land vehicles (17.9%) and insurance against fire and natural disasters (9.2%). The amount of claims settled in the first seven months of 2023 reached EUR 637.4m. EUR 257.2m of this amount related to life insurance (40.3%), while EUR 380.2m related to non-life insurance (59.7%). Within the total amount of claims settled in non-life insurance, the largest amounts related to motor vehicle liability insurance (43.3%), insurance of land motor vehicles (20.9%), and insurance against fire and natural disasters (6.5%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached EUR 29.6m in July 2023, increasing by 18.7% on a monthly basis. Market capitalisation increased by 0.7% relative to the previous month and stood at EUR 38.7bn, of which stocks amounted to EUR 20.8bn, bonds to EUR 17.9bn and ETFs to 15m. As for stock indices, the largest monthly rise was recorded by CROBEXindustrija (4.4%), while CROBEXkonstrukt recorded the largest monthly decrease (0.4%). The main ZSE stock index (CROBEX) also rose (by 2.6%), as did CROBEXtr (by 3.1%). The main bond index CROBIS declined by 0.02%, while CROBIStr increased by 0.2%. SPAN d.d. was the stock most traded in July, with its turnover amounting to EUR 3.7m (16.2% of the overall trade in July) and a 10.0% monthly price increase.

INVESTMENT FIRMS

At the end of the second quarter of 2023, there were 23 legal entities authorised to provide investment services, namely 5 investment firms, 12 credit institutions and 6 investment fund management companies. The second quarter of 2023 saw a quarterly increase of the value of assets managed by all the three groups of authorised legal persons, namely those managed by investment firms (1.0%), investment fund management companies (3.6%) and credit institutions (4.4%). The assets under the custody of credit institutions fell by 1.5% compared to the previous quarter, while the assets under the custody of investment firms increased by 14.1%. The second quarter of 2023 saw the distribution of financial instruments in the amount of EUR 240.7m (a 21.0% decline compared to the previous quarter), 80.0% of which was accounted for by units of domestic UCITS, 8.0% by units of foreign UCITS, and the remaining 12.0% by foreign certificates and other foreign financial instruments.

INVESTMENT FUNDS

In July 2023, there were 109 UCITS operating on the market, three more than in the previous month. Their total net assets amounted to EUR 2.1bn at the end of the month, increasing by EUR 40.2m or 2.0% compared to the previous month. Total monthly net payments of all UCITS in July were positive and reached EUR 24.7m. Negative monthly net payments were recorded by bond funds (EUR -22.9m), balanced funds (EUR -3.9m) and feeder funds (EUR -0.4m). Positive monthly net payments were recorded by equity funds (EUR 4.5m) and funds categorised as “other funds” (EUR 47.3m). Bond funds’ net assets accounted for 40.3% of the total net assets of all UCITS at the end of July, while equity and balanced funds accounted for 16.4% and 13.6% of total UCITS’ net assets respectively. In July 2023, positive asset-weighted average monthly returns were generated by all UCITS, namely equity (2.8%), feeder (1.2%), balanced (0.8%), other (0.6%) and bond (0.2%) UCITS.

The net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to EUR 141.7m (a 0.9% monthly increase), with the monthly return of the fund reaching 1.1%.

LEASING COMPANIES

At the end of the second quarter of 2023, the total assets of 15 leasing companies stood at EUR 3.4bn, an increase of 18.9% on an annual basis. The pre-tax profit recorded by leasing companies fell by EUR 303m (8.6%) compared to the same period last year, amounting to EUR 31.6m. The outstanding contract value of active contracts recorded an 18.4% annual increase in the operating lease segment, while its annual increase in the finance lease segment reached 19.3%. The value of newly concluded contracts in the operating lease segment rose in the first half of the year by 53.4% relative to the same period last year, while this growth in the finance lease segment amounted to HRK 28.3%. This was mostly due to an increase in the value of contracts involving passenger cars (EUR 472.1m), commercial vehicles (EUR 164.1m) and plant, machinery and equipment (EUR 68.8m) as leased assets. The total value of newly concluded contracts in the first half of 2023 increased by EUR 222.6m (31.6%) on an annual basis.

FACTORING COMPANIES

At the end of the second quarter of 2023, there were 4 factoring companies operating on the market. The total assets of three^[3] factoring companies amounted to EUR 16.6m, while their profit before tax reached EUR 0.4m. The transaction volume in the first half of 2023 was still dominated by classic factoring totalling EUR 42.6m (87.3% of all transactions), as were receivables, with classic factoring amounting to EUR 6.5m (66.4% of all receivables) at the end of the second quarter of 2023.

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

[3] The data refer to three factoring companies, as one company did not submit its report as at 30 June 2023.