November 2022 Monthly Report

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

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of November 2022, mandatory pension funds (MPFs) had 2,172,342 members, that is, 6,412 (0.3%) members more than in the previous month. Category B funds had 86.0% of all MPF members, while category A and category C funds had 10.3% and 3.7% of all MPF members respectively. Out of 7,864 new members, 7,607 (96.7%) were automatically allocated by Regos. Termination of membership due to retirement or death was recorded with respect to 1,452 insured persons. Total net contributions paid to MPFs in November amounted to HRK 705.4m (0.5% of net assets at end-October 2022), almost the same as in the previous month. At the same time, total payments from all MPFs due to personal account closures reached HRK 187.2m (0.1% of net assets at end-October 2022), dropping by 24.5% compared to the previous month.

At the end of November 2022, net assets of MPFs amounted to HRK 133.0bn, rising by HRK 2.2bn (1.7%) relative to the previous month. Nominal monthly Mirex returns reached 1.8% for category A, 1.3% for category B and 1.2% for category C. Annual Mirex returns reached -1.2% for category A, -2.8% for category B and -4.7% for category C, while annualised[1] returns since the beginning of MPFs’ operation reached 6.4% for Mirex A, 5.1% for Mirex B and 3.4% for Mirex C[2].

Bond investments of MPFs totalled HRK 84.1bn (63.3% of total assets) at end-November, making their share increase by 0.1 p.p. on a monthly basis. The share of equity investments in MPFs’ assets increased slightly (0.5 p.p.), amounting to 20.1% of MPFs’ assets (HRK 26.7bn). Investments in domestic shares accounted for 11.9%, while investments in foreign shares accounted for 8.2% of mandatory pension funds’ assets. As regards other investment types, investments in investment funds amounted to HRK 14.5bn (10.9% of the assets), making the proportion of these investments in total assets increase by 0.01 p.p. relative to the previous month. Investments in cash and deposits amounted to HRK 6.9bn, or 5.2% of MPFs’ assets at the end of November 2022.

THIRD PILLAR PENSION FUNDS

In November 2022, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.4% on a monthly basis, while the number of members of 20 closed-ended voluntary pension funds (CVPFs) increased by 0.3%, making the number of members of these funds reach 370,860 and 46,878 respectively. Total monthly payments made to voluntary pension funds (VPFs) in November 2022 amounted to HRK 78.1m (1.0% of net assets at end-October), increasing by 32.6% compared to the previous month. Total payments made from these funds reached HRK 23.2m, decreasing by HRK 0.8m (3.2%) compared to total payments made from VPFs in the previous month. Total payments from VPFs made due to retirement and other reasons accounted for 76.1%, payments made due to the change of fund reached 19.9%, while those made due to death accounted for 4.0% of total payments in November. As regards total payments made due to retirement, the amount of HRK 5.6m was paid in the form of lump-sum payments, HRK 7.1m was paid through a pension company (fund), while HRK 5.0m was transferred for payment to pension insurance companies.

Net assets of VPFs increased by HRK 148.7m (2.0% on a monthly basis) and stood at HRK 7.8bn. Monthly nominal returns of VPFs ranged from 0.5% to 3.3%, while returns on an annual basis ranged from -9.0% to -0.9%. As regards the investment structure of VPFs, the largest part of the portfolio at the end of November was made up of bonds and amounted to a 55.2% share in total net assets, followed by stocks with a 24.7% share and investment funds with an 11.1% share. The share of bonds in VPFs’ investments increased by 1.6 p.p. on the monthly basis, the share of investments in investment funds rose by 0.1 p.p., while equity share held steady (a 0.03 p.p. growth).

INSURANCE COMPANIES

In November 2022, there were 15 insurance companies operating on the market. Their total gross written premium since the beginning of 2022 amounted to HRK 11.6bn, of which HRK 2.6bn (22.0%) related to life insurance premium and HRK 9.0bn (78.0%) to non-life insurance premium. On an annual basis, total gross written premium rose by 7.8% in the first eleven months of 2022, with the increase in non-life insurance premium totalling 11.3%, and the decline in life-insurance premium reaching 2.9%. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (32.8%), followed by insurance of land motor vehicles (16.2%) and other property insurance lines (11.3%). The amount of claims settled reached HRK 7.0bn, increasing by 7.9% on an annual basis. HRK 2.9bn of this amount related to life insurance (a 10.2% increase on an annual basis), while HRK 4.1bn related to non-life insurance (a 6.3% 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 (38.0%), insurance of land motor vehicles (19.9%), insurance against fire and natural disasters (8.9%) and other property insurance lines (11.3%).

CAPITAL MARKET

In November 2022, the total turnover on the Zagreb Stock Exchange reached HRK 224.1m, decreasing by 35.3% on a monthly basis. Market capitalisation rose slightly (by 0.8%) relative to the previous month and stood at HRK 256.9bn, of which stocks amounted to HRK 133.8bn, bonds to HRK 123.0bn and ETFs to HRK 56m. All stock indices recorded negative monthly returns, with the slightest fall having been recorded by CROBEXkonstrukt (-1.5%), and the largest by CROBEX10transport (-5.2%). The main ZSE stock indices (CROBEX and CROBEX10) recorded a monthly decrease of -1.6% and -1.7% respectively. Both bond indices grew on a monthly basis: CROBIS by 2.3% and CROBIStr by 2.4%. PODRAVKA d.d. was the stock most traded in November, with its turnover amounting to HRK 24.2m (22.8% of the overall trade in stocks in November) and a 3.3% monthly price increase.

INVESTMENT FUNDS

In November 2022, there were 100 UCITS operating on the market, four more than in the previous month, as new funds categorised as “other” started to operate, while a bond fund started its winding-up proceedings. Total net assets of UCITS amounted to HRK 16.8bn at the end of the month, increasing by HRK 369.4m or 2.3% compared to the previous month. As opposed to October, total net UCITS payments were positive again in November, totalling HRK 69.0m. Negative monthly net payments were recorded by bond funds (HRK -257.7m), feeder funds (HRK -3.2m) and balanced funds (HRK -0.9m) while funds categorised as “other” and equity funds recorded positive net payments (HRK 323.4m and HRK 7.3m respectively). Bond funds’ net assets accounted for 63.2% of the total net assets of all UCITS at the end of November, while equity and balanced funds accounted for 12.0% and 6.5% of the total net assets of UCITS respectively. In November 2022, all types of UCITS recorded positive asset-weighted average monthly returns, namely equity funds 3.0%, feeder funds 2.4%, balanced funds 2.0%, other funds 1.6% and bond funds 0.9%.

The assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 933.7m (a monthly decrease of 1.9%), with the monthly return of the fund reaching -1.7%.

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