Kuntarahoitus Oyj - Financial Statement Release

PRELIMINARY INFORMATION OF FINANCIAL STATEMENTS

PRELIMINARY INFORMATION OF FINANCIAL STATEMENTS                             
For publication on February 22, 2010                                            


Municipality Finance Plc ensured funding for municipalities and state-          
subsidised housing production                                                   

Municipality Finance Plc's loan portfolio increased by 29% in 2009, totalling   
EUR 9,741 million at the end of the year (Dec. 31, 2008: EUR 7,567 million).    
Granted new loans amounted to a record amount of EUR 2,940 million (2008: EUR   
1,683 million). In a challenging environment, the company was practically the   
sole provider of financing for municipalities, municipal federations and        
state-subsidised housing production.                                            

“Year 2009 was an eventful financial year for Municipality Finance Group. The   
year will be remembered for successful business operations despite the general  
economic instability, a share issue, a revision of organisational structure and 
strategy and. Our loan portfolio increased significantly, there was a marked    
improvement in profitability, funding was successful and our balance sheet grew 
to exceed EUR 14 billion.  The profit of EUR 34 million for the period is the   
best in the history of our company,” says CEO Pekka Averio.                     

The balance sheet of Municipality Finance Group grew by 16%, reaching EUR 14,557
million at the end of 2009 (Dec. 31, 2008: EUR 12,512 million). Capital adequacy
stood at 20.17% at the end of 2009 (Dec. 31, 2008: 13.60%). The Group's net     
operating profit before taxes for the financial year was EUR 33.7 million (2008:
EUR 2.7 million). Net interest income grew to EUR 50.6 million, representing a  
71% increase on the previous year (EUR 29.5 million in 2008).                   


Successful funding                                                              
Despite the prevailing uncertainty in the markets in early 2009, Municipality   
Finance was successful in its funding. A new record was set in funding with a   
total of EUR 5,789 million for the year (2008: EUR 4,527 million). The total    
amount of funding grew to EUR 13,218 million (2008: EUR 11,336 million). During 
the financial year, a total of 228 funding arrangements were made, 12 of them   
domestic.                                                                       

In January 2010, Municipality Finance received significant and highly valued    
recognition for its work in the international capital markets. Large            
international banks selected the company the Market Choice SSA Issuer of the    
Year in a vote organised by MTN-i. The voters highlighted the reliable, fast and
flexible manner in which Municipality Finance operates in the markets as the    
justification for the award.                                                    


The best credit ratings                                                         
The two important credit rating agencies, Standard & Poor's and Moody's,        
confirmed the best possible credit ratings for Municipality Finance Plc during  
the financial year. Municipality Finance Plc is the only Finnish credit         
institution with the same ratings as the Republic of Finland.                   

“One of the things that contributed to ensuring adequate financing for the      
Finnish local government sector was the sector's financial position - one of the
strongest in Europe - which was also highlighted by the credit rating agencies”,
states Municipality Finance's CEO Pekka Averio. In addition, Pekka Averio draws 
attention to Moody's citing the professionalism of Municipality Finance's staff 
and operating model, adding: “We are also proud of the areas the agencies       
singled out for special mention, commending us for our conservative risk        
management policies.”                                                           


Share issue exceeded expectations                                               
The share issue carried out in the spring by Municipality Finance exceeded all  
expectations. The number of shareholders increased by 40 and the total new      
equity brought in through new subscriptions exceeded EUR 40 million.            

Distribution of profits for the 2009 financial year                             
Municipality Finance Plc's distributable funds total EUR 9,799,043.00, of which 
the profit for the financial year is EUR 9,770,510.79. The Board of Directors   
will propose to the Shareholders' Meeting that the distributable funds be used  
by declaring a dividend of EUR 0.25 per share for the year 2009, totalling EUR  
9,765,949.50, with EUR 33,093.50 retained in equity.                            

The full financial statements for 2009 will be published on March 2, 2010.      


Municipality Finance Plc                                                        

Further information:                                                            
Pekka Averio, CEO, tel. +358 (0)9 6803 6211, +358 (0)500 406 856                
Esa Kallio, Executive Vice President, tel. +358 (0)9 6803 6231, +358 (0)50 337  
7953                                                                            


Municipality Finance Plc is a local government credit institution owned by      
Finnish municipalities, the Local Government Pensions Institution and the       
Central Government and is the parent company of the Municipality Finance Group. 
The company's mission is to ensure the most suitable financing solutions for its
clients, to be efficient and to grow profitably. The Group's balance sheet      
totalled EUR 14,557 million on December 31, 2009. The company offers            
market-based funding to municipalities and municipal federations, to            
municipality-controlled entities and non-profit housing corporations. The 
company's funding, which is guaranteed by the Municipal Guarantee Board, is     
obtained from international capital markets and domestic investors. Funding     
provided by the company goes into social and non-profit service projects, such  
as schools, housing and hospitals. The Group includes Financial Advisory        
Services Inspira Ltd, which offers financial advisory services for investments, 
financial and asset arrangements, asset management and various analysis         
services.

Attachments:

tilinpäätös_ennakkotiedote_2009_englanti_final.doc