March 2021 Monthly Report

Published: 23. April 2021.

Overview of supervised entities’ activities in the financial services sector for March 2021

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

In March 2021, mandatory pension funds had 2,065,960 members, 0.1% more than in the previous month, while the growth on a quarterly basis amounted to 0.4%. As in the previous months, the majority of new members (3,250 new members in March 2021) did not actively select their voluntary pension fund, but were assigned to the funds by Regos (3,028 or 93.2% of the new members were assigned by Regos in March). Termination of membership due to retirement or death was recorded with respect to 772 members, while this number reached 2,483 for the first three months. Total net contributions paid to mandatory pension funds amounted to HRK 614.7m, increasing by 7.0% in comparison with March 2020. At the same time, total payments from all the mandatory pension funds due to personal account closures reached HRK 98.2 m, rising by 71.7% compared to March 2020.

Mandatory pension funds’ net assets amounted to HRK 123.8bn, increasing by 2.0% relative to the previous month and by 4.0% relative to the end of 2020. Monthly Mirex index returns reached 2.6% for category A, 1.6% for category B and 0.1% for category C. Mirex index returns in the first quarter of 2021 ranged from 0.2% for category C to 2.9% for category B to 4.7% for category A, primarily reflecting the effect of low index values shortly after a strong contraction of prices in March 2020. Annualised Mirex index returns since the beginning of mandatory pension funds’ operation reached 7.4% for Mirex A, 5.5% for Mirex B and 5.0% for Mirex C at the end of March. Bond investments of mandatory pension funds reached 65.2% of total net assets, while investments in shares accounted for 19.4% of the investments. As regards other investment types, the most common were investments in investment funds, making up a 10.2% share.

THIRD PILLAR PENSION FUNDS

The number of members of all eight open-ended voluntary pension funds increased in March 2021 by 0.6% on a monthly basis (0.3% relative to end-2020), totalling 336,230 at the end of the month. Total monthly payments made to open-ended voluntary pension funds amounted to HRK 52.8m, increasing by 8.9% in comparison with March 2020. Total monthly payments made from these funds fell, by 18.3% on an annual basis, amounting to HRK 24.4m.

On the basis of legal amendments that entered into force at the end of 2019, voluntary pension funds’ members may, at the moment of their retirement, select the manner in which their pension will be paid out: through a pension insurance company (as before the amendments), through a pension company (fund) or through an insurance company (a payment method that has not gained ground yet). Moreover, the members may also opt for a lump-sum cash payment of a maximum of HRK 100,000, with the remaining part paid out by means of one of the selected payment methods.

In the first three months of 2021, members of open-ended voluntary pension funds were paid a total of HRK 77.2m. Most of the payments (HRK 25.4m or 32.9%) were made as lump-sum cash payments. A total of HRK 16.1m or 29% of the payments were made by transferring the funds to the pension insurance companies for the purpose of pension payments, while pension companies (funds) made HRK 12.7m or 16.5% of total payments. Other payments, reaching HRK 22.9 or 29.7% of total payments, were related to payments in the event of death, payments due to the change of fund and payments due to other reasons.

The number of members of 20 closed-ended voluntary pension funds rose by 0.03% on a monthly basis in March 2021, (a 1.0% fall in the first three months of 2021) totalling 44,775 at the end of the month. At the same time, total monthly payments made to these funds increased by 0.5% on an annual basis, amounting to HRK 8.5m, whereas total monthly payments made from them reached HRK 5.3m, rising by 0.4% on an annual basis.

Total payments made from closed-ended voluntary pension funds in the first three months of 2021 amounted to HRK 14.7m. The majority of these payments were made up of payments due to the change of fund reaching HRK 4.2m or 29.0% of total quarterly payments made by these funds. The amount reaching HRK 4.0m (26.9% of total payments) was transferred to the pension insurance companies, and a similar amount (HRK 3.7m or 25.2%) was paid to members through lump-sum payments. The remaining amount reaching HRK 1.8m (12.5% of total payments) was paid to the members through a pension company (fund).

Open-ended voluntary pension funds’ net assets grew by 2.0% relative to the previous month (4.1% on a quarterly basis), reaching HRK 5.8bn, with monthly returns ranging between 0.1% and 2.6%. In the first quarter of 2021, the returns ranged from 0.1% to 4.3%. A similar monthly growth in net assets was recorded by closed-ended voluntary pension funds, too, with their assets totalling HRK 1.24bn at the end of March (a 3.3% increase in comparison with end-2020). Their monthly returns ranged from 0.3% to 2.4%, and their quarterly returns between 0.7% and 4.6%.

Voluntary pension funds’ investment structure was similar to that of mandatory pension funds and did not change significantly relative to the previous month, with a slightly higher share of equity investments. The largest part of the portfolio is still made up by bonds (57.7%) followed by shares with 25.6% and investment funds with 11.1%.

INSURANCE COMPANIES

In March 2021, there were 15 insurance companies operating on the market. Their total gross written premium for the first three months of 2021 amounted to HRK 3.3.bn, rising by 6.3% relative to the same period in 2020. The gross amount of their claims settled totalled HRK 1.8bn, increasing by 0.9% on an annual basis.

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached HRK 167.9m in March 2021, declining by 15.9% compared with the previous month, primarily due to a decrease in bond turnover (by 34.4%) and to fewer block trades in shares (a 36.5% fall). The order book turnover also recorded a monthly decline (by 10.8%). Market capitalisation rose by 0.3% on a monthly basis, reaching HRK 277.0bn at the end of March. As for stock indices, the largest monthly rise was recorded by CROBEXnutris (7.7%) and CROBEXprime (5.1%), while CROBEXkonstrukt reported a significant fall (11,3%). HT stock was most traded, with its turnover amounting to HRK 21.3m, and a monthly increase in price totalling 7.0%. The OTC market turnover recorded a 77.3% monthly growth.

INVESTMENT FUNDS

In March 2021, there were 91 UCITS operating on the market (3 UCITS are undergoing winding up-proceedings), or five funds fewer than in February, due to a merger of three equity funds into a new equity fund, and of two bond funds into a new fund belonging to the category ‘other’, while another two bond funds ceased their operation. Total net assets of UCITS amounted to HRK 19.3bn at the end of March, growing by 2.0% on a monthly basis. Bond funds’ assets accounted for a 75.9% share in total assets of UCITS.

In March, average annual returns of all UCITS categories weighted by assets were positive, with the highest weighted average return (2.6%) having been recorded by equity funds, and the lowest average monthly return (0.2%) by bond funds. Equity funds recorded the largest average return on a quarterly basis, too (4.7%), while the smallest return (-0.03%) was reported by bond funds.

In all UCITS categories, total payments to the funds exceeded those made from the funds (the total value of net payments to the funds recorded by all UCITS amounted to HRK 363.9m).

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 1.0bn.

The full report is available at Publications/Monthly reports