January 2021 Monthly Report
Overview of supervised entities’ activities in the financial services sector for January 2021 (4th quarter 2020)
PENSION FUNDSSECOND PILLAR PENSION FUNDS
In January 2021, mandatory pension funds had 2,061,027 members, 0.2% more than in the previous month. Out of 4,480 new members, 4,313 were assigned by Regos, almost all of them to category A funds. Termination of membership, i.e. exit from the second pillar due to retirement or death was recorded with respect to 844 members. Total net contributions paid to mandatory pension funds in January amounted to HRK 556.0m, declining by -1,5% in comparison with January 2020. At the same time, total payments from all the mandatory pension funds due to personal account closures reached HRK 90.2m, rising by 66.0% compared to January 2020.
Mandatory pension funds’ net assets amounted to HRK 120.2bn, increasing by 1% relative to the previous month. Monthly Mirex index returns reached 1.1% for category A, 0.6% for category B and 0.2% for category C. Its annual returns remained positive, ranging from 1.1% to 1.2%. Annualised Mirex index returns since the beginning of mandatory pension funds’ operation have reached 7.0% for Mirex A, 5.4% for Mirex B and 5.1% for Mirex C. At the end of January, bonds dominated the mandatory pension funds’ investment structure with a 67.2% share, while investments in shares accounted for 18.6% of the investments. As regards other investment types, most common were investments in investment funds, making up a 9.4% share.
THIRD PILLAR PENSION FUNDS
In January 2021, the number of members of all the 8 open-ended voluntary pension funds fell by -0.8% on a monthly basis, in spite of 1,841 new members, reaching a total of 332,500 at the end of the month. Total monthly payments made to open-ended voluntary pension funds amounted to HRK 55.4m, declining by -18.2% in comparison with January 2020. Total monthly payments made from these funds also fell, by -24.2% on an annual basis, amounting to HRK 24.6m. The number of members of 20 closed-ended voluntary pension funds dropped by -1.0% on a monthly basis, totalling 44,777 at the end of the month. Total monthly payments made to these funds decreased, too, by -2.4% on an annual basis, amounting to HRK 7.5m, whereas total monthly payments made from them stood at HRK 5.2m, rising by 18.9% on an annual basis.
Open-ended voluntary pension funds’ net assets grew by 1.1% on a monthly basis, reaching HRK 5.6bn, with monthly returns ranging between 0.1% and 1.1%. The range of annual returns was slightly broader, with returns of some funds reaching negative levels (between -2.7% and 1.7%). An increase in net assets was recorded by closed-ended voluntary pension funds, as well, (by 0.9%), with their assets totalling HRK 1.2bn at the end of the month. Their monthly returns ranged from 0.2% to 1.1%, and their annual returns between -1.2% and 2.7%. Voluntary pension funds’ investment structure is similar to that of mandatory pension funds, with a slightly higher share of equity investments. The largest part of the portfolio is made up by bonds (58.8%), followed by shares with 24.2% and investment funds with 9.5%.
PENSION INSURANCE COMPANIES
In 2020, the existing Raiffeisen Pension Insurance Company was joined on the market by Hrvatsko mirovinsko osiguravajuće društvo (Croatian Pension Insurance Company), that started its operation in July. At the end of 2020, these two pension insurance companies covered 4,427 users and 4,419 contracts in the area of mandatory pension insurance and 6,273 users and 6,390 contracts in the area of voluntary pension insurance. Their total assets reached HRK 1.4bn at the end of 2020 (a 65% rise compared with the previous year), and their profit for 2020 totalled HRK 8.2m (a 181.4% increase on an annual basis). The significant growth in the assets and profit of the pension insurance companies was due to a larger number of insured persons who opt for the so-called combined payment from the first and second pillar at the moment of their retirement, considering the possibilities offered by such retirement benefits (supplement to the pension from the first pillar and partial lump sum payments reaching 15% of the total capitalised savings transferred to the pension insurance company under certain conditions).
In January 2021, there were 15 insurance companies operating on the market. Their total gross written premium reached HRK 1.1.bn in January 2021, rising by 1.9% relative to January 2020. The gross amount of their claims settled totalled HRK 515.8m, growing by 8.7% on an annual basis.
In January 2021, total turnover on the Zagreb Stock Exchange reached HRK 166.9m, declining by -27.1% compared with December 2020, primarily due to fewer block trades in shares. At the same time, the order book turnover recorded an 8.8% rise, mostly due to bond trading. Market capitalisation rose by 0.6% on a monthly basis, reaching HRK 272.4bn at the end of January. All indices apart from CROBEXturist recorded a positive monthly growth, with CROBEXindustrija recording the sharpest (9.3%) rise. Valamar Riviera stock was most traded, with its turnover amounting to almost HRK 21m, and a monthly increase in price totalling 0.7%. The OTC market turnover recorded a monthly growth totalling 33.4%.
In the 4th quarter of 2020, there were 27 legal persons on the market authorised to provide investment services, namely 7 investment firms, 13 credit institutions and 7 investment fund management companies. The value of assets managed by investment firms rose by 5.4% on a quarterly basis, whereas assets managed by credit institutions and investment fund management companies increased by 4.0% and 1.3% respectively. However, the values of assets managed by legal persons authorised to provide investment services lowered on an annual basis, from -28.1% to -3.7%. Total assets under custody of investment firms has been rising since the end of 2019, totalling HRK 1.8bn in December 2020.
In January 2021, there were 96 UCITS operating on the market (3 UCITS are undergoing winding up-proceedings, and 1 fund has been deleted form the register), as many as in the previous month. Total net assets of UCITS amounted to HRK 18.5bn at the end of January, growing by 1.8% on a monthly basis. However, their assets keep recording a decline on an annual basis (-19.6%), primarily due to significant withdrawal of funds from bond funds in March 2020, as a result of investors’ reaction to uncertainties caused by the escalation of the coronavirus pandemic. Bond funds’ assets accounted for a 77.8% share in total assets of UCITS at the end of January 2020.
At the beginning of 2021, all categories of UCITS reported positive returns, with the highest weighted average return (0.9%) having been recorded by equity UCITS, and the lowest average monthly return (-0.1%) 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 280m).
The Fund for Croatian Homeland War Veterans and Members of their Families recorded a 2.4% rise in assets on a monthly basis, with the assets reaching HRK 988.1m at the end of January.
In 2020, leasing companies experienced significant difficulties in their operation due to the coronavirus pandemic. Total assets of 15 leasing companies stood at HRK 19.8bn at the end of 2020, decreasing by -8.5% relative to the end of the previous year. At the same time, their profit fell by -67.9% (HRK 168.1m). The outstanding agreed value of active operating and finance lease contracts declined by -7.5% and -4.2% respectively on an annual basis. The value of newly concluded contracts also decreased significantly (-16.8% in operating lease and -37.6% in finance lease on an annual basis), reflecting reduced economic activity in the context of the coronacrisis and high uncertainties.
At the end of 2020, there were 4 factoring companies operating on the market, 2 fewer than at the end of the previous year. The company PLUS A-FAKTOR started winding-up proceedings, while the company ERSTE FACTORING was acquired by its parent bank. Total assets of factoring companies stood at HRK 325.2m at the end of 2020, while their profit reached HRK 7.4m. The 2020 transaction volume was dominated by classic factoring with a HRK 783.6m (78.9%) share, and so were receivables, with the classic factoring share reaching HRK 116.1m or 64.9% at the end of the year.
The full report is available at Publikacije/Mjesečna izvješća.