June 2022 Monthly Report

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

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of June 2022, mandatory pension funds (MPFs) had 2,133,373 members, i.e. 4,782 (0.2%) members more than in the previous month. Category B funds had 88.3% of all MPF members, while category A and category C funds had 8.5% and 3.2% of all MPF members respectively. Out of 6,299 new members, 6,174 (98.0%) were automatically allocated by REGOS. Termination of membership due to retirement or death was recorded with respect to 1,517 insured persons. Total net contributions paid to MPFs in June amounted to HRK 699.4m or 2.6% more compared to the previous month. At the same time, total payments from all MPFs due to personal account closures reached HRK 253.8m, dropping by 19.4% compared to May.

At the end of June 2022, net assets of MPFs amounted to HRK 129.1bn, declining by HRK 1.8bn (1.4%) relative to the previous month. Monthly Mirex returns reached -2.4% for category A, -1.7% for category B and -1.0% for category C. Annual Mirex returns reached 0.1% for category A, -2.1% for category B and -4.5% for category C, while annualised returns since the beginning of MPFs’ operation reached 6.6% for Mirex A, 5.1% for Mirex B and 3.5% for Mirex C[1].

At the end of June, bond investments of MPFs totalled HRK 83.53bn (64.7% of total assets), making their share increase by 0.91 p.p. on a monthly basis. The share of equity investments in MPFs’ assets decreased in June, by 0.42 p.p. on a monthly basis, amounting to HRK 26.2bn or 20.3% of MPFs’ assets. Investments in domestic shares accounted for 12.4%, while investments in foreign shares accounted for 7.9% of MPFs’ assets. As regards other investment types, investments in investment funds amounted to HRK 13.7bn (10.6% of the assets), making the proportion of these investments in total assets decrease by 0.54 p.p. relative to the previous month. At the end of June 2022, investments in cash and deposits amounted to 4.0% of the assets, reaching HRK 5.2 bn.

THIRD PILLAR PENSION FUNDS

In June 2022, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.5% on a monthly basis, while the number of members of 20 closed-ended voluntary pension funds (CVPFs) increased by 1.2%, making the number of members of these funds reach 363,263 and 46,589 respectively. Total monthly payments made to voluntary pension funds (VPFs) in June 2022 amounted to HRK 55.69m, decreasing by 13.2% compared to the previous month. Total payments made from these funds reached HRK 28.18m, rising by HRK 1m (6.8%) compared to total payments made from VPFs in the previous month. Total payments from VPFs made due to retirement and other reasons accounted for 76.3%, payments made due to the change of fund reached 17.0%, while those made due to death accounted for 6.7% of total payments in June. As regards total payments made due to retirement, the amount of HRK 6.32m was paid in the form of lump-sum payments, HRK 6.81m was paid through a pension company (fund), while HRK 8.37m was transferred for payment to pension insurance companies.

In June 2022, net assets of VPFs decreased by HRK 119.3m (1.6% on a monthly basis) and stood at HRK 7.53bn at the end of the month. Monthly returns of VPFs ranged from -3.3% to -0.9%, while returns on an annual basis ranged from -8.0% to -2.0%. As regards the investment structure of VPFs, at the end of June 2022, the largest part of the portfolio was made up of bonds and amounted to a 53.8% share in total assets, followed by stocks with a 25.3% share and investment funds with a 10.4% share. The share of bonds in VPFs’ investments rose slightly (by 0.02 p.p.) on a monthly basis, while the share of investments in investment funds and in equities fell by 0.59 p.p. and 0.27 p.p. respectively.

INSURANCE COMPANIES

In June 2022, there were 15 insurance companies operating on the market. Their total gross written premium in the first six months of 2022 amounted to HRK 6.89bn, of which HRK 1.54bn (22.4%) related to life insurance premium and HRK 5.35bn (77.6%) to non-life insurance premium. On an annual basis, total gross written premium rose by 7.5% in the first six months, with the increase in non-life insurance premium totalling 10.9%, and the decline in life-insurance premium reaching 2.8%. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (29.8%), followed by insurance of land motor vehicles (15.0%) and other property insurance lines (14.2%). The amount of claims settled reached HRK 3.7bn, increasing by 4.4% on an annual basis. HRK 1.57bn of this amount related to life insurance (a 3.8% increase on an annual basis), while HRK 2.12bn related to non-life insurance (a 5.0% increase on an annual basis). In the total amount of claims settled in non-life insurance in the first six months of 2022, the largest amounts relate to motor vehicle liability insurance (40.1%), insurance of land vehicles (19.9%), insurance against fire and natural disasters (8.5%) and other property insurance lines (9.7%).

CAPITAL MARKET

In June 2022, the total turnover on the Zagreb Stock Exchange reached HRK 150.2m, decreasing by 25.3% on a monthly basis. Market capitalisation fell slightly (by 1.4%) relative to the previous month and stood at HRK 263.9bn, of which stocks amounted to HRK 137.3bn, bonds to HRK 126.5bn and ETFs to 66m. As for stock indices, the largest monthly rise was recorded by CROBEXturist (1.12%), while CROBEXindustrija recorded the largest monthly decrease (-9.1%). The main ZSE stock indices (CROBEX and CROBEX10) recorded a monthly fall (-3.2% and -3.6% respectively), as did bond indices CROBIS (-1.7%) and CROBIStr (-1.4%). Valamar Riviera d.d. was the stock most traded in June, with its turnover amounting to HRK 17.43m (13.7% of the overall trade in stocks in June) and a 2.8% monthly price increase. In June 2022, the Croatian Financial Services Supervisory Agency, the Central Depository and Clearing Company and the Zagreb Stock Exchange organised the 13th annual training intended for companies whose securities are admitted to trading on the regulated market of the Zagreb Stock Exchange, which was attended by more than 110 representatives of issuers.

INVESTMENT FUNDS

In June 2022, there were 93 UCITS operating on the market, one fewer than in the previous month, as a bond fund was merged with another bond fund. Total net assets of UCITS amounted to HRK 16.69bn at the end of the month, decreasing by HRK 0.44bn or 2.6% compared to the previous month. June also saw a continued negative trend in total monthly net outflows from UCITS (HRK -74.4m, i.e. 0.4% of all UCITS’ assets relative to the end of May). Negative monthly net payments were recorded by all UCITS categories: HRK -25.13m by feeder funds (3.9% of feeder funds’ assets compared to the end of May), HRK -22.11m by bond funds (0.2% of bond funds’ assets compared to the end of May), HRK -13.51m by equity funds (0.6% of equity funds’ assets compared to the end of May), HRK -11.49m by balanced funds (1.0% of balanced funds’ assets compared to the end of May) and HRK -2.16m by funds categorised as “other funds” (0.1% of other funds’ assets compared to the end of May). Bond funds’ net assets accounted for 67.4% of net assets of all UCITS at the end of June, while equity and balanced funds accounted for 12.5% and 6.8% of UCITS’ net assets respectively. As regards asset-weighted average monthly returns, all UCITS categories recorded negative monthly returns again: feeder funds -4.4%, equity funds -4.0%, balanced funds -4.0%, funds categorised as other funds -3.3% and bond funds -1.1%.

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 974.6m (a 1.3% monthly decrease), with the monthly return of the fund reaching -1.1%.

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