April 2022 Monthly Report

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

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of April 2022, mandatory pension funds (MPFs) had 2,125,356 members, i.e. 2,954 (0.14%) members more than in the previous month. Category B funds had 89.06% of all MPF members, while category A and category C funds had 7.92% and 3.01% of all MPF members respectively. Out of 4,200 new members, 4,035 (96.07%) were automatically assigned by Regos. Termination of membership due to retirement or death was recorded with respect to 1,246 insured persons. Total net contributions paid to MPFs in April amounted to HRK 670.6m or 0.9% more compared to the previous month. At the same time, total payments from all the MPFs due to personal account closures reached HRK 121.5m, rising by 18.25% compared to March.

At the end of April 2022, net assets of MPFs amounted to HRK 131.4bn, declining by HRK 717.8m (0.54%) relative to the previous month. Monthly Mirex returns reached -1.30% for category A, -0.88% for category B and -1.18% for category C. Annual Mirex returns reached 4.52% for category A, 1.36% for category B and -3.21% for category C, while annualised returns since the beginning of MPFs’ operation reached 7.00% for Mirex A, 5.28% for Mirex B and 3.81% for Mirex C[1].

At the end of April, bond investments of MPFs totalled HRK 84.4 bn (64.2% of total assets), making their share increase by 0.80 p.p. on a monthly basis. The share of equity investments in the assets of MPFs decreased in April, by 0.36 p.p. on a monthly basis, amounting to HRK 27.1bn or 20.65% of MPFs’ assets. Investments in domestic shares accounted for 12.53%, while investments in foreign shares accounted for 8.11% of MPFs’ assets. As regards other investment types, investments in investment funds amounted to HRK 15.3bn (11.7% of the assets), making the proportion of these investments in total assets decrease by 0.19 p.p. relative to the previous month. Investments in cash and deposits amounted to 3.4% of the assets, or HRK 4.4bn.

THIRD PILLAR PENSION FUNDS

In April 2022, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.50% on a monthly basis, while the number of members of 20 closed-ended voluntary pension funds (CVPFs) decreased by 0.04%, making the number of members of these funds reach 359,267 and 46,002 respectively. Total monthly payments made to voluntary pension funds (VPFs) in April 2022 amounted to HRK 55.47m, decreasing by 14.2% compared to the previous month.

Total payments made from these funds reached HRK 26.98m, decreasing by HRK 19.2m (41.51%) compared to total payments made from VPFs in the previous month. Total payments from VPFs made due to retirement and other reasons accounted for 72.21%, payments made due to the change of fund reached 20.69%, while those made due to death accounted for 7.09% of total payments in April. As regards total payments made due to retirement, the amount of HRK 7.19m was paid in the form of lump-sum payments, HRK 6.78m was paid through a pension company (fund), while HRK 5.51m was transferred for payment to pension insurance companies.

In April 2022, net assets of VPFs decreased by HRK 62.3m (0.81% on a monthly basis) and stood at HRK 7.66bn. Monthly returns of VPFs ranged from -2.42% to -0.37%, while returns on an annual basis ranged from -4.06% to 2.71%. As regards the investment structure of VPFs, the largest part of the portfolio was made up of bonds and amounted to a 53.86% share in total net assets, followed by stocks with a 25.59% share and investment funds with an 11.43% share. The share of bonds in VPFs’ investments increased on the monthly basis by 0.57 p.p., the share of investments in investment funds rose by 0.09 p.p., while equity share increased by 0.08 p.p.

PENSION INSURANCE COMPANIES (PICs)

At the end of the first quarter of 2022, there were two pension insurance companies operating on the market and covering 8,642 and 5,471 users in the area of mandatory and voluntary pension insurance respectively. The total assets of the PICs amounted to HRK 2,2bn at the end of the first quarter of 2022, rising by HRK 641.3m or 41.8% compared to the same period last year. Their total comprehensive income in the first three months reached HRK -6,1m, decreasing by HRK 7.2m relative to the same period in 2021.

INSURANCE COMPANIES

In April 2022, there were 15 insurance companies operating on the market. Their total gross written premium in the first four months of 2022 amounted to HRK 4.56bn, of which HRK 1.06bn (23.2%) related to life insurance premium and HRK 3.5bn (76.8%) to non-life insurance premium. On an annual basis, total gross written premium rose by 6.78% in the first four months, with the increase in non-life insurance premium totalling 9.89%, and the decline in life-insurance premium reaching 2.38%. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (28.7%), followed by insurance of land motor vehicles (14.7%) and other property insurance lines (13.2%). The amount of claims settled reached HRK 2.51bn, increasing by 3.2% on an annual basis. HRK 1.09bn of this amount related to life insurance (a 4.4% increase on an annual basis), while HRK 1.42bn related to non-life insurance (a 2.4% rise on an annual basis). In the total amount of claims settled in non-life insurance in April, the largest amounts relate to motor vehicle liability insurance (40.3%), insurance of land motor vehicles (19.6%), insurance against fire and natural disasters (7.8%) and other property insurance lines (10.3%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached HRK 160.9m in April 2022, decreasing by 50.7% on a monthly basis. Market capitalisation fell slightly (by 0.41%) relative to the previous month and stood at HRK 269.9bn, of which stocks amounted to HRK 140.0bn, bonds to HRK 129.8bn and ETFs to 66m. As for stock indices, the largest monthly rise was recorded by CROBEXtransport (7.99%), while CROBEXnutris recorded the largest monthly decrease (-2.52%). A monthly increase was also recorded by the major ZSE stock indices CROBEX (1.47%) and CROBEX10 (1.48%), while bond indices are still negative on a monthly basis, namely CROBIS -0.78%, and CROBIStr -0.59%. Valamar Riviera d.d. was the stock most traded in April, with its turnover amounting to HRK 19.31m (12.82% of the overall trade in stocks in April) and an 8.70% monthly price increase.

INVESTMENT FIRMS

In the first quarter of 2022, there were 25 legal entities authorised to provide investment services, namely 6 investment firms, 13 credit institutions and 6 investment fund management companies. As in the previous quarter, in the first quarter of 2022 a rise (amounting to 0.47%) was recorded only by assets managed by investment firms, while the value of assets managed by credit institutions and investment fund management companies fell by 9.13% and 4.87% respectively. Assets under custody of investment firms continued their growing trend, that amounted to 3.65% compared to the previous quarter, while assets under custody of credit institutions declined by 0.14% relative to the previous quarter. The first quarter of 2022 saw the distribution of HRK 2.16bn of financial instruments (a 7.5% increase compared to the previous quarter), 87.4% of which are units of domestic UCITS.

INVESTMENT FUNDS

In April 2022, there were 93 UCITS operating on the market, two funds fewer than in the previous month, as one bond fund was liquidated, while another bond fund was merged with a feeder fund. Total net assets of UCITS amounted to HRK 17.56bn at the end of the month, decreasing by HRK 0.52bn or 2.87% compared to the previous month. April saw a slow-down of the negative trend in monthly net payments, which remained negative (HRK -256.6m), primarily due to negative net payments recorded by bond UCITS (HRK -340.4m). Positive net payments were recorded by equity funds (HRK 34.5m), balanced funds (HRK 16.1m), feeder funds (HRK 15.4m) and funds categorised as “other funds” (HRK 17.9m). Bond funds’ net assets accounted for 67.1% of the total net assets of all UCITS at the end of April, while equity and balanced funds accounted for 12.7% and 7.1% of the total UCITS’ net assets respectively. As regards asset-weighted average monthly returns, all types of UCITS recorded negative monthly returns again: feeder funds -2.02%, equity funds -1.88%, balanced funds -2.97%, funds categorised as other funds -2.51% and bond funds -1.23%.

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 1.03bn (a 0.54% monthly increase), with the monthly return of the fund reaching 0.76%.

LEASING COMPANIES

At the end of the first quarter of 2022, the total assets of 15 leasing companies stood at HRK 20.6bn, an increase of 4.42% on an annual basis. Income before tax recorded by the leasing companies rose by HRK 59.3m (88.3%) compared to the same period last year, amounting to HRK 126.4m. The outstanding contract value of active contracts continued its downward trend in the operating lease segment, decreasing by 2.65% on the annual level, while in the finance lease segment it rose by 5.67%. As regards the value of newly concluded contracts in the operating lease segment, the annual growth in contract value reached 4.27%, while this growth in the finance lease segment amounted to HRK 29.62%. This was mostly due to an increase in the value of contracts involving passenger cars (HRK 1.5bn), commercial vehicles (HRK 455m) and plant, machinery and equipment (HRK 205.6m) as leased assets. The total value of newly concluded contracts in the first quarter of 2022 increased by HRK 1.8bn (25.18%) on an annual basis.

FACTORING COMPANIES[2]

At the end of the first quarter of 2022, there were 4 factoring companies operating on the market. The total assets of 3 factoring companies amounted to HRK 125.5m, while their income before tax reached HRK 1.2m. The transaction volume was still dominated by classic factoring totalling HRK 102.0m (91.5% of all transactions), as were receivables, with classic factoring amounting to HRK 87.1m (79.9% of the receivables) at the end of the first quarter of 2022.

The full report is available at Publications/Monthly reports.

[1] Beginning of operation: MPFs category B: 30/4/2002; MPFs category A and C: 21/08/2014

[2]The data relating to the company undergoing liquidation proceedings were not included in the preliminary data shown.