September 2022 Monthly Report

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

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of September 2022, mandatory pension funds (MPFs) had 2,160,216 members, i.e. 9,724 (0.45%) members more than in the previous month. Category B funds had 86.7% of all MPF members, while category A and category C funds had 9.8% and 3.5% of all MPF members respectively. Out of 11,144 new members, 10,913 (97.9%) were automatically allocated by Regos. Termination of membership due to retirement or death was recorded with respect to 1,420 insured persons. Total net contributions paid to MPFs in September amounted to HRK 719.6m (0.5% of net assets at end-August 2022) or 2.0% more compared to the previous month. At the same time, total payments from all MPFs due to personal account closures reached HRK 157.0m (0.1% of net assets at end-August), rising by 0.5% compared to the previous month.

At the end of September 2022, net assets of MPFs amounted to HRK 129.4bn, declining by HRK 3.1bn (2.3%) relative to end-August. Nominal monthly Mirex returns reached -3.7% for category A, -2.8% for category B and -2.1% for category C. Annual Mirex returns reached -2.9% for category A, -4.0% for category B and -6.1% for category C, while annualised[1] returns since the beginning of MPFs’ operation reached 6.2% for Mirex A, 5.0% for Mirex B and 3.3% for Mirex C[2].

At the end of September, bond investments of MPFs totalled HRK 84.4bn (65.2% of total assets), making their share increase by 0.6 p.p. on a monthly basis. The share of equity investments in MPFs’ assets amounted to 19.5% of MPFs’ assets (HRK 25.2bn), a decrease of by 0.9 p.p. on a monthly basis. Investments in domestic shares accounted for 12.1%, while investments in foreign shares accounted for 7.4% of mandatory pension funds’ assets. As regards other investment types, investments in investment funds amounted to HRK 13.6bn (10.5% of the assets), making the proportion of these investments in total assets decrease by 0.2 p.p. relative to the previous month. Investments in cash and deposits amounted to 4.0% of the assets, or HRK 5.1 bn.

THIRD PILLAR PENSION FUNDS

In September 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) fell by 0.01%, making the number of members of these funds reach 367,700 and 46,720 respectively. Total monthly payments made to voluntary pension funds (VPFs) in September 2022 amounted to HRK 56.8m (0.7% of net assets at end-August), decreasing by 9.7% compared to the previous month. Total payments made from these funds in September 2022 reached HRK 26.1m, rising by HRK 3.7m (16.8%) compared to total payments made from VPFs in August 2021. Total payments from VPFs made due to retirement and other reasons accounted for 75.8%, payments made due to the change of fund reached 20.9%, while those made due to death accounted for 3.3% of total payments in September. As regards total payments made due to retirement, the amount of HRK 5.8m was paid in the form of lump-sum payments, HRK 6.9m was paid through a pension company (fund), while HRK 7.0m was transferred for payment to pension insurance companies. In September 2022, the amount reaching HRK 88,000 was paid through life insurance for the first time.

In September 2022, net assets of VPFs decreased by HRK 196.1m (2.5% on a monthly basis) and stood at HRK 7.5bn. Monthly nominal returns of VPFs ranged from -5.0% to -1.4%, while returns on an annual basis ranged from -11.6% to -3.6%. As regards the investment structure of VPFs, the largest part of the portfolio was made up of bonds and amounted to a 56.7% share in total net assets, followed by stocks with a 24.3% share and investment funds with a 10.6% share. The share of bonds in VPFs’ investments increased on the monthly basis by 0.3 p.p., the share of investments in investment funds rose by 0.1 p.p., while equity share decreased by 0.8 p.p.

INSURANCE COMPANIES

In September 2022, there were 15 insurance companies operating on the market. Their total gross written premium since the beginning of 2022 amounted to HRK 9.7bn, of which HRK 2.2bn (22.4%) related to life insurance premium and HRK 7.6bn (77.6%) to non-life insurance premium. On an annual basis, total gross written premium rose by 7.19% in the first nine months 2022, with the increase in non-life insurance premium totalling 10.7%, and the fall in life-insurance premium reaching 0.6% compared with the first nine months of 2021. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (31.7%), followed by insurance of land motor vehicles (15.8%) and other property insurance lines (12.4%). The amount of claims settled reached HRK 5bn, increasing by 9.4% on an annual basis. HRK 2.4bn of this amount related to life insurance (a 13.4% increase on an annual basis), while HRK 3.2bn related to non-life insurance (a 6.6% rise on an annual basis). In the total amount of claims settled in non-life insurance in the first nine months of 2022, the largest amounts related to motor vehicle liability insurance (38.7%), insurance of land motor vehicles (20.0%), insurance against fire and natural disasters (7.9%) and other property insurance lines (12.4%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached HRK 427.7m in September 2022, increasing by 338.5% on a monthly level. Market capitalisation fell by 2.5% relative to the previous month and stood at HRK 257.1bn, of which stocks amounted to HRK 132.9bn, bonds to HRK 124.2bn and ETFs to 52.9m. As regards sectoral stock indices, CROBEXkonstrukt recorded a 2.6% monthly growth, while the other indices fell, with the largest decline having been recorded by CROBEXnutris (-8.5%). The main ZSE stock indices (CROBEX and CROBEX10) recorded a monthly fall, too (-4.7% and -5.9% respectively), as did bond indices CROBIS (-1.9%) and CROBIStr (-1.6%). NEXT d.d. was the stock most traded in September, with its turnover amounting to HRK 26.0m (17.4% of the overall trade in stocks), and a 45.5% rise in the value on a monthly basis.

INVESTMENT FUNDS

In September 2022, there were 94 UCITS operating on the market, one more than in the previous month, as another fund categorised as “other” started to operate. Total net assets of UCITS amounted to HRK 16.5bn at the end of the month, decreasing by HRK 348.4m compared to the previous month. Total monthly net payments to UCITS were still positive, amounting to HRK 71.0m in September, primarily due to positive net payments made to UCITS belonging to the “other funds” category (HRK 115.9m). Negative monthly net payments were recorded by equity funds (HRK -27.0m), balanced funds (HRK -17.8m) and feeder funds (HRK -2.7m) while bond funds recorded positive net payments (HRK 2.5m). Bond funds’ net assets accounted for 65.3% of net assets of all UCITS at the end of September, while assets of equity and balanced funds accounted for 11.5% and 6.4% of UCITS’ net assets respectively. In September 2022, all types of UCITS recorded negative asset-weighted average monthly returns, namely equity funds -6.6%, feeder funds -5.4%, balanced funds -4.9%, other funds -3.4% and bond funds -1.7%.

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 967.1m (a 4.0% monthly decrease), with the monthly return of the fund reaching -3.8%.

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