In brief: MuniFin Group in 2025
- The Group’s net operating profit excluding unrealised fair value changes* decreased by 1.5% (+2.9%) in January–December and amounted to EUR 178 million (EUR 181 million). Net interest income* was at the same level as in the year before and totalled EUR 260 million (EUR 260 million). Higher expenses compared to the comparison period weakened the net operating profit excluding unrealised fair value changes.
- Net operating profit* amounted to EUR 193 million (EUR 166 million). Unrealised fair value changes amounted to EUR 14 million (EUR -16 million) in the financial year. Unrealised fair value changes were influenced in particular by changes in market rates and credit risk spreads in the Group’s main funding markets.
- Costs* in the financial year amounted to EUR 86 million (EUR 81 million). Expenses increased mainly due to the rise in HR and administrative costs as well as in commission fee expenses.
- The Group’s leverage ratio remained at a strong level, standing at 13.1% (12.3%) at the end of December.
- At the end of December, the Group’s CET1 capital ratio was very strong at 94.0% (107.7%). The ratio was pulled down by the new CRR III regulation that was applied on 1 January 2025, resulting in a decline in the capital ratio approximately by 10 percentage points, mainly due to the increase in credit valuation adjustment risk (CVA VaR). The Group’s CET1 capital ratio was nevertheless over six times the required minimum of 15.1% (15.0%), taking capital buffers into account.
- Long-term customer financing (long-term loans and leased assets) excluding fair value changes* totalled EUR 38,510 million (EUR 35,787 million) at the end of December and saw an increase of 7.6% (8.6%). New long-term customer financing* increased by 0.6% (17.1%) in January–December 2025 and amounted to EUR 5,088 million (EUR 5,056 million). Short-term customer financing* totalled EUR 1,895 million (EUR 1,825 million).
- Of all long-term customer financing, the amount of green finance* aimed at environmentally sustainable investments totalled EUR 9,111 million (EUR 6,817 million) and the amount of social finance* aimed at investments promoting equality and communality totalled EUR 2,775 million (EUR 2,536 million) at the end of December. The amount of the newly introduced sustainability-linked loan totalled EUR 710 million (EUR 38 million). The total amount of sustainable finance increased by 34.1% (33.6%) from the previous year. The ratio of sustainable finance to long-term customer financing excluding unrealised fair value changes* grew by 6.5 percentage points to 32.7% (26.2%).
- In 2025, new long-term funding* reached EUR 10,019 million (EUR 8,922 million). At the end of December, the total funding* was EUR 49,117 million (EUR 46,737 million), of which long-term funding* made up EUR 45,042 million (EUR 43,328 million).
- The Group’s total liquidity* is very strong, standing at EUR 11,636 million (EUR 11,912 million) at the end of the financial year. The Liquidity Coverage Ratio (LCR) stood at 225% (339%) and the Net Stable Funding Ratio (NSFR) at 121% (124%) at the end of the year.
- The Board of Directors proposes to the Annual General Meeting to be held in spring 2026 a dividend of EUR 1.83 per share, totalling EUR 71.5 million. The total dividend payment in 2025 was EUR 1.86 per share, totalling EUR 72.7 million.
Comparison figures deriving from the income statement and figures describing the change during the financial year are based on figures reported for the corresponding period in 2024. Comparison figures deriving from the balance sheet and other cross-sectional items are based on the figures of 31 December 2024 unless otherwise stated. All figures presented in the Financial Statements Bulletin are those of MuniFin Group, unless otherwise stated.
* Alternative performance measure.
Key figures (Group)
| Jan–Dec 2025 | Jan–Dec 2024 | Change, % | |
| Net operating profit excluding unrealised fair value changes (EUR million)* | 178 | 181 | -1.5 |
| Net operating profit (EUR million)* | 193 | 166 | 16.3 |
| Net interest income (EUR million)* | 260 | 260 | 0.0 |
| New long-term customer financing (EUR million)* | 5,088 | 5,056 | 0.6 |
| New long-term funding (EUR million)* | 10,019 | 8,922 | 12.3 |
| Cost-to-income ratio, %* | 25.9 | 27.7 | -6.5** |
| Return on equity (ROE), %* | 7.9 | 7.2 | 10.3** |
| 31 Dec 2025 | 31 Dec 2024 | Change, % | |
| Long-term customer financing (EUR million)* | 37,909 | 35,173 | 7.8 |
| Sustainable finance (EUR million)* | 12,595 | 9,391 | 34.1 |
| Balance sheet total (EUR million) | 55,634 | 53,092 | 4.8 |
| CET1 capital (EUR million) | 1,706 | 1,646 | 3.6 |
| Tier 1 capital (EUR million) | 1,706 | 1,646 | 3.6 |
| Total own funds (EUR million) | 1,706 | 1,646 | 3.6 |
| CET1 capital ratio, %*** | 94.0 | 107.7 | -12.7** |
| Tier 1 capital ratio, %*** | 94.0 | 107.7 | -12.7** |
| Total capital ratio, %*** | 94.0 | 107.7 | -12.7** |
| Leverage ratio, % | 13.1 | 12.3 | 6.0 |
| Personnel | 185 | 178 | 3.9 |
* Alternative performance measure.
** Change in ratio.
*** The capital ratios at 31 December 2025 have been calculated in accordance with the CRR III regulation. The figures for the comparative periods have not been adjusted.
Comment on the 2025 financial year by President and CEO Esa Kallio
“Our business operations progressed very much in line with expectations in 2025. In funding, the year was even better than expected. Despite the uncertain market sentiment, investor demand remained strong and our benchmark bonds and other funding arrangements were highly successful. As a result, the costs of funding came down by the end of the year from the elevated level of the beginning of 2025.
Our customers’ demand for financing remained largely unchanged from the previous year. The year was difficult for municipal finances as Finland’s anticipated economic growth stalled and the employment service costs transferred from the government to municipalities proved higher than expected. Nevertheless, municipalities’ adjustment measures were effective and kept their financing needs steady despite extensive investment programmes. Sustaining growth in large cities, however, will require continued investment.
In affordable social housing, the demand for financing exceeded our expectations, although government interest subsidy loan authorisations were cut by half a billion euros from 2024. The government has proposed sizeable cuts to the loan authorisations also in the coming years. The Finnish system for affordable social housing is an internationally renowned success story. Undermining it is short-sighted; instead of running it down, we should be ramping it up and sharpening it. Housing construction also has a significant impact on Finland’s economic development through its employment effects and the spillover and multiplier effects rippling over to other sectors.
One of the highlights of our year was the establishment of our Happiness Grant. Our customers strengthen these pillars of happiness every day through their work and our financing. The Happiness Grant is our way of shining a spotlight on their efforts and inspiring dialogue on how society can maintain and strengthen the structures on which we can build an even better and more equal Finland where everyone is safe and future growth is possible.”
Outlook for 2026
The euro area economic outlook for 2026 has strengthened over the past six months. Despite uncertainties in global trade and geopolitics, strong momentum in the service sectors has kept unemployment low and private consumption on the rise. The ECB’s interest rate cuts have also given investments a tailwind, with activity turning towards an upward trend.
Even so, Europe’s economy is facing a multitude of risks. The geopolitical environment remains unstable, and the ultimate effects of Donald Trump’s trade policy are still highly uncertain. The US economy is at something of a crossroads, where a normal slowdown in growth could turn into a deeper-than-expected downturn. China, in turn, is grappling with increasingly severe structural challenges in its economy. In addition to challenges in the external operating environment, Europe is burdened by mounting public debt, a weak competitive position in technological transitions and security risks that are driving a much higher share of resources into defence than before.
Euro area monetary policy is not expected to undergo any major changes next year. Economic recovery is continuing at a moderate – if uncertain – pace, with inflation returning close to the ECB’s target. Markets are expecting the ECB’s key interest rates to remain stable in 2026. Public projects
aimed at strengthening defence, security of supply and infrastructure are increasing governments’ borrowing needs, which may continue to exert some upward pressure on long-term interest rates. A potential start to the reconstruction of Ukraine would have a similar effect. As the cyclical recovery
continues, monetary policy may tighten moderately from 2027 onwards, a development that market interest rates may begin to anticipate in 2026.
Finland’s economic turnaround has been slower than expected, but 2026 is expected to bring more growth-supporting factors. The decline in employment is expected to halt and domestic consumption to pick up gradually. A further growth boost is coming from green transition investment projects and major cruise ship and icebreaker deals. At the same time, public deficit is slowly coming down.
Despite municipalities’ determined fiscal adjustment measures, their funding deficit is likely to grow considerably in 2026. Municipal finances are strained by central government transfer cuts resulting from the balancing of health and social services reform transfers, personnel costs increased by rises in wages and the sizeable investment needs of larger cities. High unemployment is also driving up employment-related costs and putting a strain on tax revenues.
The housing market and construction sector remain weak spots in the economy, likely to offer little lift in 2026. Privately financed new construction is unlikely to pick up substantially, as the number of vacant rentals and unsold homes remains exceptionally high. State-subsidised housing production is set to decline sharply due to a significant reduction in interest subsidy loan authorisations.
MuniFin Group’s commission expenses may increase significantly in 2026 based on the decision made in 2025 by the Municipal Guarantee Board (MGB) to raise the guarantee fee payable to the MGB. The guarantee fee is paid for MuniFin’s funding that is guaranteed by the MGB. The MGB has decided to increase the guarantee fee more than three times calculated from the guaranteed funding.
The Group’s risk position is expected to remain stable. Also, the Group expects its capital adequacy ratio and leverage ratio to remain strong. The valuation principles set in the IFRS framework may cause significant but temporary unrealised fair value changes, some of which increase the volatility of net operating profit and make it more difficult to estimate.
These estimates are based on a current assessment of the development of MuniFin Group’s operations and the operating environment.
Further information
Esa Kallio, President and CEO, tel. +358 50 337 7953
Erika Fredman, Executive Vice President, Finance, CFO, tel. +358 50 588 0263
Further information of our operations in 2025 will be available around March 5, 2026, when our Annual Report 2025 is estimated to be published. On the same date, we will also publish the Pillar III disclosure based on the Capital Requirements Regulation, and the Corporate Governance Statement.