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Municipality Finance's capital adequacy clearly fulfils the ECB requirements

Municipality Finance Plc
Stock Exchange Release
December 4, 2017 at 3.30 PM (EET)

Municipality Finance's capital adequacy clearly fulfils the ECB requirements

As part of the yearly Supervisory Review and Evaluation Process (SREP), the
European Central Bank (ECB) has decided that Municipality Finance shall fulfil
the capital adequacy requirements imposed on it.

At the same time the Central Bank has imposed new CET1 capital buffer
requirements for Municipality Finance, effective on January 1, 2018. The
additional CET1 capital buffer requirement (P2R) is 1.75 percent, together with
a capital adequacy guidance (P2G) of 4.0 percent. Taking the existing capital
buffer requirements into consideration, the total new minimum requirement set on
Municipality Finance's CET1 ratio is 13.25 percent, which represents a 0.05
percentage point's increase compared to the year 2017.

The group's capital adequacy ratio exceeds by many times the requirement. At the
end of June 2017, the group's ratio of CET1 to risk-weighted assets was 51.8
percent and that of the parent company 52.3 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.

MUNICIPALITY FINANCE PLC

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 second largest credit institution: the company's balance sheet totals
nearly EUR 34 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.

Read more: www.munifin.fi




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