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Municipality Finance’s capital adequacy remains well above the ECB minimum requirements

Municipality Finance Plc
Stock Exchange Release
26 November 2019 at 11.30 am (EET)

Municipality Finance’s capital adequacy remains well above the ECB minimum requirements

The European Central Bank (ECB) has updated the capital buffer requirement (P2R) imposed on Municipality Finance as part of the yearly Supervisory Review and Evaluation Process (SREP). The requirement was kept unchanged at 2.25 percent. The updated capital buffer requirement is effective on 1 January 2020.

The capital buffer requirement pertains to CET1 capital. When taking account of this capital buffer requirement, the minimum for MuniFin’s CET1 ratio is currently 10.25 percent.

Municipality Finance’s capital adequacy ratio exceeds by many times the requirement. At the end of June 2019 the group’s ratio of CET1 capital ratio was 69.1 percent.

MuniFin is supervised by the European Central Bank (ECB) and the continuous SREP process is part of the banking supervision activities carried by the ECB. The banking supervision aims to ensure that credit institutions have appropriate risk management methods in place, as well as sufficient capital and liquidity.


Harri Luhtala
Executive Vice President, CFO
Tel. +358 50 592 9454

Measured by the group’s balance sheet, MuniFin (Municipality Finance Plc) is one of Finland’s largest credit institutions: the company’s balance sheet totals EUR 37 billion. 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 mission is to help its customers thrive in changing circumstances. The company ensures competitive funding for its customers in all market conditions. Its customers are Finnish municipalities, municipal federations, municipally controlled companies and non-profit housing cor­porations. Lending is used for environmentally and socially responsible investment targets such as public transportation, sustainable buildings, hospitals and healthcare centers, schools and day care centers, and homes for the elderly.

MuniFin’s customers are domestic but the company operates in a completely global business environment. It is the most active Finnish bond issuer in international capital markets. The funding is exclusively guaranteed by the Municipal Guarantee Board.

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

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