May 2022 Monthly Report

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

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of May 2022, mandatory pension funds (MPFs) had 2,128,591 members, i.e. 3,235 (0.15%) members more than in the previous month. Category B funds had 88.61% of all MPF members, while category A and category C funds had 8.17% and 3.22% of all MPF members respectively. Out of 5,600 new members, 5,472 (97.70%) were automatically assigned by Regos. Termination of membership due to retirement or death was recorded with respect to 2,246 insured persons. Total net contributions paid to MPFs in May amounted to HRK 681.7m or 1.7% more compared to the previous month. At the same time, total payments from all the MPFs due to personal account closures reached HRK 314.6m, rising by 159.1% compared to April.

At the end of May 2022, net assets of MPFs amounted to HRK 130.9bn, declining by HRK 515.3m (0.39%) relative to the previous month. Monthly Mirex returns reached 0.33% for category A, -0.72% for category B and -0.43% for category C. Annual Mirex returns reached 3.69% for category A, 0.31% for category B and -3.53% for category C, while annualised returns since the beginning of MPFs’ operation reached 6.97% for Mirex A, 5.22% for Mirex B and 3.81% for Mirex C[1].

At the end of May, bond investments of MPFs totalled HRK 83.5bn (63.8% of total assets), making their share decrease by 1.07 p.p. on a monthly basis. The share of equity investments in the assets of MPFs slightly increased in May, by 0.04 p.p. on a monthly level, amounting to HRK 27.1bn or 20.69% of MPFs’ assets. Investments in domestic shares accounted for 12.54%, while investments in foreign shares accounted for 8.14% of MPFs’ assets. As regards other investment types, investments in investment funds amounted to HRK 14.6bn (11.13% of the assets), making the proportion of these investments in total assets decrease by 0.54 p.p. relative to the previous month. Investments in cash and deposits amounted to 4.12% of the assets, or HRK 5.4bn.

THIRD PILLAR PENSION FUNDS

In May 2022, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.60% on a monthly basis, while the number of members of 20 closed-ended voluntary pension funds (CVPFs) increased by 0.07%, making the number of members of these funds reach 361,475 and 46,035 respectively. Total monthly payments made to voluntary pension funds (VPFs) in May 2022 amounted to HRK 64.12m, increasing by 15.6% compared to the previous month. Total payments made from these funds reached HRK 26.38m, decreasing by HRK 0.6m (2.24%) compared to total payments made from VPFs in the previous month. Total payments from VPFs made due to retirement and other reasons accounted for 79.55%, payments made due to the change of fund reached 15.39%, while those made due to death accounted for 5.05% of total payments in May. As regards total payments made due to retirement, the amount of HRK 7.24m was paid in the form of lump-sum payments, HRK 6.65m was paid through a pension company (fund), while HRK 7.09m was transferred for payment to pension insurance companies.

In May 2022, net assets of VPFs decreased by HRK 9.2m (0.12% on a monthly basis) and stood at HRK 7.65bn. Monthly returns of VPFs ranged from -1.71% to -0.14%, while returns on an annual level ranged from -5.35% to 1.43%. As regards the investment structure of VPFs, at the end of May 2022, the largest part of the portfolio was made up of bonds and amounted to a 53.72% share in total net assets, followed by stocks with a 25.57% share and investment funds with a 10.94% share. The share of bonds in VPFs’ investments decreased on the monthly basis by 0.14 p.p., the share of investments in investment funds fell by 0.49 p.p., while equity share decreased by 0.02 p.p.

INSURANCE COMPANIES

In May 2022, there were 15 insurance companies operating on the market. Their total gross written premium in the five months of 2022 amounted to HRK 5.71bn, of which HRK 1.27bn (22.2%) related to life insurance premium and HRK 4.44bn (77.8%) to non-life insurance premium. On an annual level, total gross written premium rose by 6.25% in the first five months, with the increase in non-life insurance premium totalling 10.74%, and the decline in life-insurance premium reaching 6.97%. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (29.3%), followed by insurance of land motor vehicles (14.7%) and other property insurance lines (14.6%). The amount of claims settled reached HRK 3.11bn, increasing by 3.1% on an annual level. HRK 1.33bn of this amount related to life insurance (a 3.9% increase on an annual level), while HRK 1.78bn related to non-life insurance (a 2.5% rise on an annual level). In the total amount of claims settled in non-life insurance in the first five months of 2022, the largest amounts relate to motor vehicle liability insurance (40.4%), insurance of land vehicles (19.8%), insurance against fire and natural disasters (8.1%) and other property insurance lines (10.0%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached HRK 188.4m in May 2022, increasing by 17.1% on a monthly level. Market capitalisation fell slightly (by 0.86%) relative to the previous month and stood at HRK 267.5bn, of which stocks amounted to HRK 138.9bn, bonds to HRK 128.6bn and ETFs to 65m. As for stock indices, the largest monthly rise was recorded by CROBEXtransport (3.12%), while CROBEX10 recorded the largest monthly decrease (-3.25%). The main stock index of the ZSE (CROBEX) recorded a monthly fall (-2.39%), as well as bond indices CROBIS (-0.76%) and CROBIStr (-0.56 %). Valamar Riviera d.d. was the stock most traded in May, with its turnover amounting to HRK 22.13m (14.36% of the overall trade in stocks in May) and a 7.43% monthly price decrease.

INVESTMENT FUNDS

In May 2022, there were 94 UCITS operating on the market, one more than in the previous month, as a new fund categorised as “other” started to operate. Total net assets of UCITS amounted to HRK 17.13bn at the end of the month, decreasing by HRK 0.43bn or 2.43% compared to the previous month. May saw a continued negative trend in total monthly net outflows from UCITS (HRK -281.7m) due to negative net payments recorded by bond UCITS (HRK --295.3m). Positive net payments were recorded by feeder funds (HRK 3.3m) and funds categorised as “other funds” (HRK 37.7m), while negative net payments were recorded by equity funds (HRK 161 thousand) and balanced funds (HRK 27.3m), together with bond funds. Bond funds’ net assets accounted for 66.7% of the total net assets of all UCITS at the end of May, while equity and balanced funds accounted for 12.8% and 7.0% 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 -1.84%, equity funds -1.37%, balanced funds -0.92%, funds categorised as other funds -0.57% and bond funds -0.18%.

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 987.2m (a 3.74% monthly decrease), with the monthly return of the fund reaching -3.50%.

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