The Croatian Financial Services Supervisory Agency (HANFA) says in its annual publication "Financial Stability", which studied the resilience of the non-banking financial sector to potential shocks until the end of 2022, that this sector would remain stable even in the event of a more marked increase in inflation and interest rates. Pročitaj više

HANFA’s study covered key developments and systemic risks to the financial services sector, notably to the insurance, leasing, factoring and pension investment industries, in the context of international and domestic macroeconomic, monetary and financial trends.

The macroeconomic stress test exercise for a period of 18 months has shown that under the baseline scenario, which includes the gradual lifting of coronavirus restrictions, a real GDP growth rate of 5.0% for this year, personal consumption growth and the introduction of the euro as legal tender in 2023, all segments of the financial services sector would see positive asset growth rates.

Pension funds would record net asset growth of 3.5% in 2021 and of 6.3% in 2022, while the projected asset growth rate for insurance companies would be slightly below 1.0% this year and 2.0% next year. Investment funds’ net assets would rise at a rate of below 1.0% this year and the next, with slightly positive yields.

Ante Zigman, President of HANFA’s Governing Council, said that this year and last year were challenging.

“The pension funds have reached HRK 130 billion. This year’s increment was such that about HRK 3 billion came from payments and nearly HRK 7 billion from yields,” he said, adding that last year’s low yields had been compensated for by high rates this year.

The insurance sector has seen a growth rate of as much as 12.0% this year, thanks to strengthening economic activity and the good tourist season.

“We are particularly glad to see that our investment funds have recovered because last year, when the pandemic began, the investment funds recorded a major drop. Last summer they fell to HRK 16 billion, while this year they have returned to the pre-pandemic level of nearly HRK 22 billion,” Zigman said, adding that leasing companies are also showing signs of recovery.