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Municipality Finance’s capital adequacy exceeds by many times the ECB’s new minimum requirement

Municipality Finance Plc
Stock Exchange Release
1 December 2016 at 1:30 PM (EET)

Municipality Finance’s capital adequacy exceeds by many times the ECB’s new minimum requirement

The European Central Bank (ECB) has imposed new CET1 capital buffer requirements for the credit institutions under its supervision. The new requirements will be effective on 1 January 2017.

As part of the yearly SREP (Supervisory Review and Evaluation Process) decision on MuniFin, the ECB imposed an additional 1.5 percent CET1 capital buffer requirement (P2R), together with a 4.2 percent capital adequacy guidance (P2G).

Taking the existing capital buffer requirements into consideration, the total new minimum requirement set on Municipality Finance’s CET1 ratio is 13.2 per cent. The company’s capital adequacy ratio exceeds by many times the new requirement. At the end of June 2016, the consolidated CET1 ratio of Municipality Finance was 45.33 per cent and that of the parent company 45.49 percent.

The continuous SREP process is part of banking supervision activities carried by ECP. The banking supervision aims to ensure the quality of risk management methods, the capital adequacy and liquidity of credit institutions.


Marjo Tomminen
Executive Vice President, CFO
Tel. +358 50 386 1764

Measured by the group’s balance sheet, MuniFin (Municipality Finance Plc) is Finland’s third largest credit institution. The company is owned by Finnish municipalities, the public sector pension fund Keva and the Republic of Finland. MuniFin is an integral part of the Finnish public economy.

MuniFin’s balance sheet totals nearly EUR 36 billion. Funding for the company is primarily obtained through the international capital markets. MuniFin’s funding is guaranteed by the Municipal Guarantee Board.

MuniFin’s mission is to ensure competitive funding for its customers in all market conditions. The company’s customers are Finnish municipalities, municipal federations, municipally controlled companies and non-profit housing cor­porations. A significant portion of lending is used for socially responsible projects such as building hospitals, healthcare centers, schools, day care centers and homes for the elderly.

The Municipality Finance Group also includes the subsidiary company, Financial Advisory Services Inspira Ltd.