October 2021 Monthly Report

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

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of October 2021, mandatory pension funds (MPFs) had 2,100,579 members, i.e. 4,036 (0.19%) more than in the previous month. The largest share of a total of 5,067 new members (94.7%) were assigned by Regos automatically. Out of the 284 new members who actively selected the fund, category A was selected by 129 new members (45.4%), category B by 142 members (50.0%) and category C by 13 members (4.6%). Termination of membership due to retirement or death was recorded with respect to 1,315 insured persons, 10.5% more than in the previous month. Total net contributions paid to MPFs in October 2021 reached HRK 639.0m, while the amount totalling HRK 6.1bn was paid to MPFs since the beginning of the year, 9.0% more than in the same period last year. Total payments from all the MPFs due to personal account closures in October reached HRK 179.0m, while total payments since the beginning of the year totalled HRK 1.5bn, a 25.4% increase compared to the same period last year.

At the end of October 2021, net assets of MPFs increased by 1.1% on a monthly basis and stood at HRK 130.5bn. Monthly Mirex returns reached 1.7% for category A, 0.8% for category B, and -0.02% for category C. Year-to-date Mirex returns reached 11.3% for category C, 6.1% for category B and 0.5% for category A, while annualised returns since the beginning of MPFs’ operation reached 7.7% for Mirex A, 5.5% for Mirex B and 4.6% for Mirex C[1].

At the end of October, bond investments of MPFs totalled HRK 82.2bn (63.0% of total assets), making their share decrease by 0.9 p.p. on a monthly basis. In the same period, the share of equity investments in the assets of MPFs rose by 2.5 p.p, amounting to HRK 27.1bn or 20.7% of MPFs’ assets. Investments in domestic shares accounted for 11.6%, while investments in foreign shares accounted for 9.1% of MPFs’ assets. As regards other investment types, investments in investment funds amounted to HRK 14.8bn (11.3% of the assets), making the proportion of these investments in total assets increase relative to the previous month (by 0.7 p.p.). Investments in cash and deposits amounted to 4.1% of the assets, or HRK 5.4bn, a 12.1% rise compared to the previous month.

THIRD PILLAR PENSION FUNDS

In October 2021, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.5%, while the number of members of 20 closed-ended voluntary pension funds (CVPFs) increased by 0.2%, making the number of members of these funds reach 348,464 and 45,588 respectively. Total monthly payments made to voluntary pension funds (VPFs) amounted to HRK 62.3m, increasing by 13.3% compared to the previous month. At the same time, total monthly payments from these funds amounted to HRK 23.5m, a 4.3% decrease compared to the previous month. Out of all the payments made from the funds, 9.3% were due to death, 25.9% due to the change of fund and 64.8% due to retirement and other reasons. As regards payments made due to retirement, the amount of HRK 5.8m was paid through a pension company (fund), HRK 6.2m was paid in the form of lump-sum payments, while the amount of HRK 3.2m was transferred for payment to pension insurance companies.

Net assets of VPFs grew by HRK 97.0m in October (1.3% on a monthly basis), reaching HRK 7.45bn, with monthly returns of individual funds ranging between -0.23% and 1.69%. Annual rates of return ranged from 0.06% to 17.51%, while year-to-date returns ranged from -0,13% to 11.48%. As regards the investment structure of VPFs, the largest part of the portfolio was made up of bonds and amounted to a 54.6% share in total net assets, followed by shares with a 25.8% share and investment funds with a 12.3% share. The share of bonds in VPFs’ investments decreased on the monthly basis by 1.8%, the equity share rose by 0.5%, while the share of investments in investment funds increased by 1.3%.

PENSION INSURANCE COMPANIES (PIC)

At the end of the third quarter of 2021, there were two pension insurance companies operating on the market and covering 6,954 and 5,768 users in the area of mandatory and voluntary pension insurance respectively. Total assets of the PICs amounted to HRK 1.9bn at the end of the third quarter of 2021, rising by HRK 632.9m or 50.0% compared to the same period last year. Their total comprehensive income in the first nine months reached HRK 4.2m, decreasing by 43.9% relative to the same period in 2020.

INSURANCE COMPANIES

In October 2021, there were 15 insurance companies operating on the market. Their total gross written premium in the first ten months of 2021 amounted to HRK 9.9bn, of which HRK 2.4bn (24.3%) related to life insurance premium and HRK 7.5bn (75.7%) to non-life insurance premium. On an annual basis, total gross written premium rose by 12.0%, with the increase in non-life insurance premium totalling 12.6%, and the rise in life-insurance premium reaching 10.0%. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (33.3%), followed by insurance of land motor vehicles (15.7%) and other property insurance lines (11.0%). The amount of claims settled reached HRK 5.8bn, increasing by 9.5% on an annual basis. HRK 2.38bn of this amount related to life insurance (a 3.3% increase on an annual basis), while HRK 3.46bn related to non-life insurance (a 14.2% increase on an annual basis). In the total amount of claims settled in non-life insurance in the first ten months of 2021, the largest part related to motor vehicle liability insurance (33.5%), insurance of land motor vehicles (18.6%), insurance against fire and natural disasters (14.0%) and other property insurance lines (12.3%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached HRK 403.1m in October 2021, increasing by 25.8% compared with the previous month. Regular trading in bonds reached HRK 28.9m (a monthly increase of 79.0%), while regular trading in shares reached HRK 204.4m (a monthly decrease of 13.6%). Regular trading in ETFs amounted to HRK 1.9m (a monthly decrease of 25.6%). The order book turnover recorded a monthly decrease of 7.9%, while the OTC market turnover increased by 17.7%. Market capitalisation fell slightly on a monthly basis, by 0.01%, and stood at HRK 271.94bn at the end of October, with an equal part of shares and bonds. As for stock indices, the largest monthly rise was recorded by CROBEXnutris (23.7%) and CROBEXindustrija (19.6%), while CROBEXkonstrukt reported the largest monthly decrease (-37.9%). HT d.d. stock was the stock most traded in October, with its turnover amounting to HRK 27.92m (13.66% of the overall trade in stocks) and a monthly decrease in price of 2.1%.

INVESTMENT FIRMS

In the third quarter of 2021, there were 26 legal entities authorised to provide investment services, namely 7 investment firms, 13 credit institutions and 6 investment fund management companies. The largest quarterly rise (4.4%) was recorded by assets managed by credit institutions, followed by assets managed by investment fund management companies (3.6%) and assets managed by investment firms (1.0%). Assets under custody of investment firms continued their growing trend, that amounted to 14.1% compared to the previous quarter and to 111.5% compared to the same period last year. Assets under custody of credit institutions fell compared to the previous quarter by 1.5%, but increased by 10.9% relative to the same period last year. In the third quarter of 2021, HRK 2.0bn of financial instruments were distributed (an increase of 1.5% compared to the previous quarter), 96.5% of which are units of domestic UCITS.

INVESTMENT FUNDS

In October 2021, there were 94 UCITS operating on the market, with their total net assets amounting to HRK 21.7bn at the end of the month and growing by 0.85% compared to the previous month. This growth was due to positive market developments along with positive total net payments made to funds that reached HRK 79.5m. Positive net payments were recorded by equity funds (HRK 41.7m), balanced funds (HRK 39.3m), feeder funds (HRK 41.0m) and funds categorised as other funds (HRK 42.2), while only bond funds recorded negative net payments (HRK -84.6m). In October 2021, all UCITS categories apart from bond funds recorded positive asset-weighted average monthly returns: equity funds 3.12%, funds categorised as other funds 0.85%, balanced funds 1.40%, feeder funds 3.62% and bond funds -0.38%. Bond funds’ net assets accounted for 71.7% of the total net assets of all UCITS at the end of October, while equity and balanced funds accounted for 10.9% and 6.4% of the total net assets of UCITS respectively. The assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 997.3m (a monthly decrease of 2.3%), with the monthly return of the fund reaching -2.18%.

LEASING COMPANIES

At the end of the third quarter of 2021, the total assets of 15 leasing companies stood at HRK 20.3bn, a decrease of 1.75% on an annual basis. The comprehensive income of the leasing companies rose by HRK 181.6m (144.19%) compared to the same period last year, amounting to HRK 307.0m. The third quarter of 2021 saw a continued falling trend in outstanding contract value of active contracts, reaching 3.8% in the operating lease segment and 0.6% in the finance lease segment. As regards the value of newly concluded contracts in the operating lease segment, the annual growth in contract value reached 12.1%, while this growth in the finance lease segment amounted to HRK 25.6% This was mostly due to a large increase in the value of contracts involving passenger cars (HRK 3.2bn), commercial vehicles (HRK 1.1bn) and plant, machinery and equipment (HRK 566.4m) as leased assets. On an aggregate level, the value of newly concluded contracts recorded by the total leasing industry rose in the third quarter of 2021 by HRK 1.2bn (23.3%) on an annual basis.

FACTORING COMPANIES

At the end of the third quarter of 2021, there were 4 factoring companies operating on the market. Their total assets amounted to HRK 330.4m (a 12.6% fall compared to the same period in 2020), and their total profit reached HRK 5.3m (a 43.8% annual increase). The transaction volume was still dominated by classic factoring totalling HRK 533.9m (77.4% of the transactions), as were receivables, with classic factoring amounting to HRK 123.2m (69.4% of the receivables) at the end of the third quarter.    

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