2016-02-09 13:00:45 CET
2016-02-09 13:00:45 CET
BIRTINGARSKYLDAR UPPLÝSNINGAR
Kuntarahoitus Oyj - Financial Statement Release
Municipality Finance Plc Financial Statements Bulletin
Municipality Finance Plc
Financial Statements Bulleting
9 February 2016 at 2 p.m. (CET+1)
Municipality Finance Plc Financial Statements Bulletin
1 January - 31 December 2015
2015 in Brief:
* The Group's net operating profit amounted to EUR 151.8 million (2014: EUR
144.2 million). The growth over the previous year was 5.3%.
* Net interest income grew by 7.6% compared with the previous year, totalling
EUR 172.2 million (2014: EUR 160.0 million).
* The balance sheet total was EUR 33,889 million (2014: EUR 30,009 million).
The growth compared to the end of 2014 was 12.9%.
* The Group's capital adequacy continued to strengthen, with the ratio of
total own funds to risk-weighted assets being 64.61% at the end of 2015
(2014: 33.53%) and the ratio of Tier 1 capital to risk-weighted assets being
62.49% (2014: 29.98%).
* In 2015 the company reinforced its capital structure with an AT1 capital
loan worth EUR 350 million, under Additional Tier 1 capital. The leverage
ratio at the end of 2015 was 3.15% (2014: 1.8%).
* The lending portfolio increased to EUR 20,088 million (2014: EUR 19,205
million) and the total of new loans withdrawn amounted to EUR 2,687 million
(2014: EUR 2,775 million).
* The leasing portfolio stood at EUR 187 million at the end of the year (2014:
EUR 133 million).
* Total funding acquisition for 2015 amounted to EUR 7,297 million (2014: EUR
7,440 million). A total of EUR 4,824 million was issued in short-term debt
instruments under the Euro Commercial Paper programme in 2015 (2014: EUR
5,904 million). The total amount of funding grew by 6.8% to EUR 28,419
million (2014: EUR 26,616 million).
* At the end of year, total liquidity was EUR 7,732 million (2014: EUR 6,751
million).
* The turnover of Municipality Finance's subsidiary Inspira was EUR 2.3
million (2014: EUR 2.5 million). Net operating profit at the end of 2015
totalled EUR 0.2 million (2014: EUR 0.4 million).
+---------------------------------------------------+-----------+-----------+
|Key figures (Consolidated): |31 Dec 2015|31 Dec 2014|
+---------------------------------------------------+-----------+-----------+
|Net interest income (EUR million) | 172.2| 160.0|
| | | |
+---------------------------------------------------+-----------+-----------+
|Net operating profit (EUR million) | 151.8| 144.2|
| | | |
+---------------------------------------------------+-----------+-----------+
|New loans issued (EUR million) | 2,687| 2,775|
| | | |
+---------------------------------------------------+-----------+-----------+
|New long-term funding (EUR million) | 7,297| 7,440|
| | | |
+---------------------------------------------------+-----------+-----------+
|Balance sheet total (EUR million) | 33,889| 30,009|
| | | |
+---------------------------------------------------+-----------+-----------+
|Tier 1 capital (EUR million) | 1,033.8| 557.2|
+---------------------------------------------------+-----------+-----------+
|Total own funds (EUR million) | 1,068.8| 623.1|
| | | |
+---------------------------------------------------+-----------+-----------+
|Ratio of Tier 1 capital to risk-weighted assets, % | 62.49| 29.98|
| | | |
+---------------------------------------------------+-----------+-----------+
|Ratio of total own funds to risk-weighted assets, %| 64.61| 33.53|
| | | |
+---------------------------------------------------+-----------+-----------+
|Leverage ratio, % | 3.15| 1.8|
+---------------------------------------------------+-----------+-----------+
|Return on equity (ROE), % | 14.84| 21.66|
| | | |
+---------------------------------------------------+-----------+-----------+
|Cost-to-income ratio | 0.16| 0.15|
| | | |
+---------------------------------------------------+-----------+-----------+
|Personnel | 95| 90|
+---------------------------------------------------+-----------+-----------+
Comment on the Financial Year by President and CEO Pekka Averio:
2015 will go down in Municipality Finance's history as a year of success amid
great pressure for change. The year was characterised by economic uncertainty,
major structural reforms initiated in Finland, and the designation of the
company as a nationally significant credit institution.
Despite these momentous changes, the company managed to grow in relation to all
the main performance indicators. The consolidated operating profit reached a new
record high of EUR 151.8 million. The balance sheet total rose to EUR 33.9
billion, and the ratio of own funds to risk-weighted assets to 64.61%.
Municipality Finance specialises in financing the Finnish municipal sector and
government-subsidised housing production. The company is unquestionably the most
important provider of financing in its customer group, and therefore it plays a
central role as a building block of the Finnish society.
Demand for loans from Municipality Finance's customers remained stable in 2015.
Demand for leasing financing continued to grow significantly, with the growth in
popularity particularly of leasing solutions for real estate.
Municipality Finance was able to obtain funding from international capital
markets at very competitive prices, despite market volatility. During the year,
the company issued two benchmark bonds, worth USD 1 billion each. Overall, 315
funding transactions were carried out by the company in 2015.
In September, Municipality Finance issued an AT1 capital loan worth EUR 350
million, under Additional Tier 1 capital. This historic transaction was the
first of its kind in Finland, and it helped the company prepare for the coming
leverage ratio requirement related to banking regulation.
Operating Environment in 2015
2015 was characterised by economic uncertainty, as well as by major structural
reforms initiated in Finland, such as the social and health services reform and
the related decision to establish new autonomous regions that will organise
services. Municipality Finance's operations continued to develop positively.
Company's profitability improved while the volume of business transactions grew.
The growth in volume and human resources demands continuous development of
operations and processes from the company. In the early part of the year, the
company streamlined its organisation in order to serve its customers more
flexibly and efficiently.
Municipality Finance was designated as a nationally significant financial
institution in Finland. The company was transferred from under the Finnish
Financial Supervisory Authority to the supervision of the European Central Bank
(ECB) at the start of 2016. This was preceded by a comprehensive assessment
involving asset quality review and stress testing. Municipality Finance clearly
exceeded all the minimum requirements set.
For many years, Municipality Finance has striven to anticipate future demands
arising from tightening financial regulation. In 2015 the company reinforced its
capital structure with an AT1 capital loan worth EUR 350 million, under
Additional Tier 1 capital, which means it already fulfils the leverage ratio
requirement as it is currently expected to be. The issue was met with extensive
interest by investors, and it was oversubscribed by nearly 300%.
During 2015, Municipality Finance's ratings remained stable - Aaa from Moody's
and AA+ from Standard & Poor's. Both agencies changed their rating outlooks to
negative, in line with their outlooks for Finland as a whole. The outlook shift
is primarily due to the slow recovery of the Finnish economy.
Municipality Finance is an important part of the basic financial structure of
Finnish society, and the only credit institution in Finland exclusively
specialising in financing the municipal sector and government-subsidised housing
production. During the year, there were no significant changes in the financing
needs of the Finnish municipal sector, and the demand for loans continued to
grow at a conservative rate. Municipality Finance was once again the single most
important financier for its customers.
Net Operating Result and Balance Sheet
The Group's operations remained positive. The Group's net operating profit for
the financial year amounted to EUR 151.8 million (2014: EUR 144.2 million). The
parent company's net operating profit stood at EUR 147.7 million (2014: EUR
143.8 million). The figure includes changes in the IFRS fair valuation of
financial items that are unrealised and change in the fluctuation of market
interest rates. The impact of IFRS valuations on profit was EUR -2.7 million
(2014: EUR -2.1 million).
Net interest income continued developing well, with a growth of 7.6%. The total
net interest income at the end of the year was EUR 172.2 million (2014: EUR
160.0 million). Net interest income includes EUR 1.4 million in commissions from
the repurchase of own bonds (2014: EUR 1.5 million). The improvement in net
interest income was thanks to the growth in business volume.
The net operating profit of Municipality Finance's subsidiary Inspira was EUR
0.2 million for 2015 (2014: EUR 0.4 million).
The Group's commission expenses totalled EUR 3.8 million at the end of the year
(2014: EUR 3.8 million). Operating expenses increased by 14.8% to EUR 24.9
million during the year (2014: EUR 21.7 million). The growth in expenses was
mainly due to an increase in administrative expenses resulting from changes in
the company's operating environment, as well as on-going IT system development
projects. Additionally, from 2015 Municipality Finance has incurred new fees
charged by the authorities, including financial supervision costs paid to the
ECB and the Financial Stability Authority of the Ministry of Finance.
Administrative expenses came to EUR 16.7 million (2014: EUR 14.7 million), of
which personnel expenses comprised EUR 10.9 million (2014: EUR 9.3 million).
Depreciation of tangible and intangible assets amounted to EUR 1.6 million
(2014: EUR 1.4 million). Other operating expenses were EUR 6.6 million (2014:
EUR 5.5 million).
The Group's balance sheet total stood at EUR 33,889 million at the end of 2015,
compared to EUR 30,009 million at the end of the previous year. Balance sheet
growth is due to the growth of business. The liquidity was kept at a high level
at the end of 2015, as the company prepared for refinancing needs coming up in
early 2016.
Capital Adequacy
The Group's own funds totalled EUR 1,068.8 million at the end of 2015 (2014: EUR
623.1 million). Common Equity Tier 1 (CET1) totalled EUR 686.3 million (2014:
EUR 556.4 million). Tier 1 capital amounted to EUR 1,033.8 million (2014: EUR
557.2 million). The unrealised profits from assets measured at fair value (fair
value reserve) have been included in CET1 capital (transitional provision for
the period 1 January 2015-31 December 2017). In the figures for the comparison
year, the fair value reserve is included in Tier 2 capital. Tier 2 capital
totalled EUR 35.0 million (2014: EUR 65.9 million).
The Group's capital adequacy improved significantly. The ratio of own funds to
risk-weighted assets was 64.61% (2014: 33.53%). The ratio of Common Equity Tier
1 (CET1) to risk-weighted assets was 41.49% (2014: 29.94%).
Customer Financing
The total volume of tender requests received by Municipality Finance during the
year was EUR 4,834 million (2014: EUR 4,387 million), of which it won EUR 3,181
million (2014: EUR 2,814 million). The total amount of new loans withdrawn in
2015 was lower than in the previous year at EUR 2,687 million (2014: EUR 2,775
million). At the end of the year, the long-term loan portfolio stood at EUR
20,088 million (2014: EUR 19,205 million). This represents an increase of 4.6%
on the previous year.
There was also continued demand for short-term financing. At the end of 2015,
the total value of municipal commercial paper and municipal company commercial
paper programmes concluded with Municipality Finance was EUR 4,087 million
(2014: EUR 3,787 million). The company's balance sheet included EUR 1,115
million in such papers issued by municipalities and municipal companies at the
end of the year (2014: EUR 845 million), and during the year, customers acquired
EUR 9,231 million in financing under short-term programmes (2014: EUR 9,638
million).
Besides loans, Municipality Finance offers municipalities, municipal federations
and municipal enterprises derivative contracts tailored to their needs for the
management of interest rate risk. Demand for derivative products remained high
in 2015. As interest rates remained low, customers hedged their loans against
future increases in market rates.
Municipality Finance has offered leasing financing to municipalities, municipal
federations and municipality-controlled entities since 2010. Long-term work has
been carried out to ensure maximum transparency in the service model and its
pricing. Demand for leasing solutions grew solidly in 2015. The group's
customers are particularly interested in leasing-based solutions for real estate
financing. The leasing portfolio grew by 40.7% during the year and stood at EUR
187 million at year-end (2014: EUR 133 million).
Demand for Inspira's services increased in 2015. Inspira's turnover in 2015 was
EUR 2.3 million (2014: EUR 2.5 million). Its net operating profit for the
financial year was EUR 0.2 million (2014: EUR 0.4 million).
Capital Markets Operations
During the year, EUR 7,297 million was acquired in long-term funding (2014: EUR
7,440 million). A total of EUR 4,819 million was issued in short-term debt
instruments under the Euro Commercial Paper programme during the year (2014: EUR
5,904 million), and total funding under the programme amounted to EUR 1,230
million at the year-end (2014: EUR 1,259 million). Total funding at the end of
2015 was EUR 28,419 million (2014: EUR 26,616 million). Of this amount, 18% was
denominated in euros (2014: 18%) and 82% in foreign currencies (2014: 82%). The
company issued bonds denominated in 12 different currencies in 2015 (2014: 15
currencies). Municipality Finance currently obtains all of its funds from the
international capital market, where the group is a well-known, valued and active
participant. The total of long-term funding arrangements made in 2015 was 315
(2014: 264).
The group's funding strategy is to diversify funding sources, and this has
proved to be a successful approach. Municipality Finance has various
diversification strategies: by market, geographically, by issuing bonds targeted
at different investor groups, and by issuing bonds with different maturities.
Active, long-term collaboration with investors has increased the company's
visibility in various markets, and investor relations are increasingly
progressing towards the maintenance of key investor relationships.
The company's liquidity remained excellent during 2015, despite exceptionally
sharp fluctuations due to major variations in the cash collateral received on
the basis of derivative collateral agreements. New investments were made in
covered bonds, as well as bonds issued by public sector entities in strong
eurozone countries and bonds issued by banks.
At the end of 2015, investments in securities totalled EUR 5,897 million (2014:
EUR 5,581 million), and their average credit rating was AA (2014: AA). The
average maturity of the security portfolio stood at 2.3 years at the end of
2015 (2014: 2.3 years). Additionally, the company had EUR 1,834 million in other
investments (2014: EUR 1,170 million), of which EUR 1,814 million was in central
bank deposits (2014: EUR 593 million) and EUR 20 million in money market
deposits in credit institutions (2014: EUR 27 million). There were no repurchase
agreements at the end of 2015 (2014: EUR 550 million).
Risk Management
There were no material changes in the company's risk position in 2015. Risks
remained within the set limits and, based on the company's assessment, the risk
management function met its requirements.
Credit Ratings
Municipality Finance credit ratings
+-------------------------+-----------------+--------+------------------+
|Rating agency |Long-term funding|Outlook |Short-term funding|
+-------------------------+-----------------+--------+------------------+
|Moody's Investors Service|Aaa |Negative|P-1 |
+-------------------------+-----------------+--------+------------------+
|Standard & Poor's |AA+ |Negative|A-1+ |
+-------------------------+-----------------+--------+------------------+
Municipality Guarantee Board credit ratings
+-------------------------+-----------------+--------+------------------+
|Rating agency |Long-term funding|Outlook |Short-term funding|
+-------------------------+-----------------+--------+------------------+
|Moody's Investors Service|Aaa |Negative|P-1 |
+-------------------------+-----------------+--------+------------------+
|Standard & Poor's |AA+ |Negative|A-1+ |
+-------------------------+-----------------+--------+------------------+
Municipality Finance's funding is guaranteed by the Municipal Guarantee Board,
which has the same credit ratings from Moody's and Standard & Poor's as
Municipality Finance. Both credit ratings remained unchanged during the year,
but Moody's changed the outlook for its highest rating, Aaa, to negative in June
2015. Moody's revised its credit rating for Municipality Finance in December
2015, keeping it unchanged at Aaa.
Standard & Poor's changed the outlook for Municipality Finance's AA+ credit
rating from stable to negative in October 2015, and confirmed both the rating
and the outlook in December.
The lowering of the outlook for long-term funding was a direct consequence of a
similar lowering of the rating of the Republic of Finland, because in accordance
with the credit rating methodology of Moody's and Standard & Poor's, the credit
rating of Municipality Finance and the Municipal Guarantee Board cannot be
higher than the rating of the sovereign.
Prospects for 2016
The outlook for global economic development is unstable. The actions of the US
Federal Reserve and the European Central Bank, fluctuations in share prices,
circumstances in the developing world, and the tightening of the global security
situation will all have an impact on the economy. Economic development is
predicted to be slower in Finland than in the rest of Europe. Slower growth will
put pressure on the Finnish government and municipalities, which will have a
direct impact on Municipality Finance's operating environment.
Tightening financial regulation is evident in the form of changes in the demand
and supply of various investment products. Demand for Municipality Finance's
products is solid, and the company is seen by the capital markets as a reliable
and interesting business partner.
The Finnish government will continue the structural reforms planned; the most
essential are the social and health services and regional government reforms.
These changes might have an effect to the company's business. The most important
task is to ensure the continuity of funding, even after the social and health
services and regional government reforms. There is also increased pressure on
Finland to increase government subsidised housing production in urban growth
areas.
The company will continue to systematically develop its operations, while also
actively working to anticipate the changing needs of its customers. There will
be continued focus on improving customer service and systems in order to further
enhance efficiency, as well as on digitisation of services.
From the start of 2016, Municipality Finance has been directly under the
supervision of the ECB, which implies new development projects related to
operations and reporting.
The profitability of Municipality Finance's operations is expected to remain
strong in 2016.
Proposal from the Board of Directors Concerning Profit for the Financial Year
Municipality Finance Plc has distributable funds of EUR 54,688,359.49, of which
the profit for the financial year totalled EUR 1,530,009.22. The Board proposes
to the Annual General Meeting that no dividend be paid out, and that the
distributable funds of EUR 54,688,359.49 be retained in equity.
The Board of Directors considers this to be a well-reasoned decision, as the
company needs to continue preparing for tightening own funds requirements by
increasing its Tier 1 capital through profit.
The Annual Report for 2015 can be found on the company's website
(www.munifin.fi) from 1 March 2016.
Municipality Finance Plc
Further information:
Pekka Averio, President and CEO, tel. +358 500 406 856
Esa Kallio, Executive Vice President, Deputy CEO, tel. +358 50 337 7953
Marjo Tomminen, Executive Vice President, CFO, tel. +358 50 386 1764
Municipality Finance Group
Consolidated statement of financial position
+------------------------------------------------------+-----------+-----------+
|(EUR 1,000) |31 Dec 2015|31 Dec 2014|
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
| | | |
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|ASSETS | | |
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|Cash and balances with central banks | 1,813,813| 592,907|
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|Loans and advances to credit institutions | 614,294| |
| | | 1,072,099|
| | | |
+------------------------------------------------------+-----------+-----------+
|Loans and advances to the public and public sector| 20,275,561| |
|entities | | 19,337,730|
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|Debt securities | 7,003,318| |
| | | 6,416,586|
| | | |
+------------------------------------------------------+-----------+-----------+
|Shares and participations | 9,620| |
| | | 9,789|
| | | |
+------------------------------------------------------+-----------+-----------+
|Derivative contracts | 3,925,025| |
| | | 2,321,699|
| | | |
+------------------------------------------------------+-----------+-----------+
|Intangible assets | 5,812| |
| | | 4,757|
| | | |
+------------------------------------------------------+-----------+-----------+
|Tangible assets | 2,298| |
| | | 2,465|
| | | |
+------------------------------------------------------+-----------+-----------+
|Other assets | 6,277| |
| | | 2,196|
| | | |
+------------------------------------------------------+-----------+-----------+
|Accrued income and prepayments | 232,792| |
| | | 249,032|
| | | |
+------------------------------------------------------+-----------+-----------+
|TOTAL ASSETS | 33,888,811| |
| | | 30,009,259|
| | | |
+------------------------------------------------------+-----------+-----------+
| | | |
+------------------------------------------------------+-----------+-----------+
|LIABILITIES AND EQUITY | | |
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|LIABILITIES | | |
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|Liabilities to credit institutions | 4,893,270| |
| | | 3,882,771|
| | | |
+------------------------------------------------------+-----------+-----------+
|Liabilities to the public and public sector entities | 954,026| |
| | | 963,662|
| | | |
+------------------------------------------------------+-----------+-----------+
|Debt securities issued | 24,804,490| |
| | | 23,230,298|
| | | |
+------------------------------------------------------+-----------+-----------+
|Derivative contracts | 1,799,692| |
| | | 934,399|
| | | |
+------------------------------------------------------+-----------+-----------+
|Other liabilities | 2,131| |
| | | 2,056|
| | | |
+------------------------------------------------------+-----------+-----------+
|Accrued expenses and deferred income | 217,768| |
| | | 249,902|
| | | |
+------------------------------------------------------+-----------+-----------+
|Subordinated liabilities | 35,542| 37,943|
+------------------------------------------------------+-----------+-----------+
|Deferred tax liabilities | 138,576| |
| | | 114,124|
| | | |
+------------------------------------------------------+-----------+-----------+
|TOTAL LIABILITIES | 32,845,497| |
| | | 29,415,155|
| | | |
+------------------------------------------------------+-----------+-----------+
| | | |
+------------------------------------------------------+-----------+-----------+
|EQUITY AND NON-CONTROLLING INTEREST | | |
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|Share capital | 42,583| |
| | | 42,583|
| | | |
+------------------------------------------------------+-----------+-----------+
|Reserve fund | 277| |
| | | 277|
| | | |
+------------------------------------------------------+-----------+-----------+
|Fair value reserve | 11,354| |
| | | 30,914|
| | | |
+------------------------------------------------------+-----------+-----------+
|Reserve for invested non-restricted equity | 40,366| |
| | | 40,366|
| | | |
+------------------------------------------------------+-----------+-----------+
|Retained earnings | 601,065| |
| | | 479,686|
| | | |
+------------------------------------------------------+-----------+-----------+
|Total equity attributable to parent company equity| 695,645| |
|holders | | 593,825|
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|Non-controlling interest | 216| |
| | | 279|
| | | |
+------------------------------------------------------+-----------+-----------+
|Other equity instruments issued | 347,454| -|
+------------------------------------------------------+-----------+-----------+
|TOTAL EQUITY | 1,043,314| 594,104|
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|TOTAL LIABILITIES AND EQUITY | 33,888,811| 30,009,259|
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
Municipality Finance Group
Consolidated income statement
+--------------------------------------+-------------------+-------------------+
|(EUR 1,000) |1 Jan - 31 Dec 2015|1 Jan - 31 Dec 2014|
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
|Interest income | 158,462| |
| | | |
| | | 212,351|
+--------------------------------------+-------------------+-------------------+
|Interest expense | 13,782| |
| | | -52,343|
| | | |
+--------------------------------------+-------------------+-------------------+
|NET INTEREST INCOME | 172,245| |
| | | 160,008|
| | | |
+--------------------------------------+-------------------+-------------------+
|Commission income | 5,157| |
| | | |
| | | 5,047|
+--------------------------------------+-------------------+-------------------+
|Commission expense | -3,776| |
| | | -3,834|
| | | |
+--------------------------------------+-------------------+-------------------+
|Net income from securities and foreign| -3,865| |
|exchange transactions | | -5,711|
+--------------------------------------+-------------------+-------------------+
|Net income from available-for-sale| 6,336| |
|financial assets | | 6,629|
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
|Net income from hedge accounting | 583| |
| | | 3,693|
| | | |
+--------------------------------------+-------------------+-------------------+
|Other operating income | 21| |
| | | 11|
| | | |
+--------------------------------------+-------------------+-------------------+
|Administrative expenses | -16,653| |
| | | -14,721|
| | | |
+--------------------------------------+-------------------+-------------------+
|Depreciation and impairment on | -1,600| |
|tangible and intangible assets | | -1,442|
| | | |
+--------------------------------------+-------------------+-------------------+
|Other operating expenses | -6,646| |
| | | -5,521|
| | | |
+--------------------------------------+-------------------+-------------------+
|NET OPERATING PROFIT | 151,801| |
| | | 144,160|
| | | |
+--------------------------------------+-------------------+-------------------+
|Income tax expense | -30,307| |
| | | |
| | | -28,908|
+--------------------------------------+-------------------+-------------------+
|PROFIT FOR THE PERIOD | 121,494| |
| | | 115,252|
| | | |
+--------------------------------------+-------------------+-------------------+
|Profit attributable to: | | |
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
| Equity holders of the parent| 121,379| |
|company | | 115,044|
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
| Non-controlling interest | 115| |
| | | 207|
| | | |
+--------------------------------------+-------------------+-------------------+
Statement of comprehensive income
+--------------------------------------+-------------------+-------------------+
|(EUR 1,000) |1 Jan - 31 Dec 2015|1 Jan - 31 Dec 2014|
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
|Profit for the period | 121,494| |
| | | 115,252|
| | | |
+--------------------------------------+-------------------+-------------------+
|Components of other comprehensive| | |
|income | | |
+--------------------------------------+-------------------+-------------------+
| Items to be reclassified to profit or| | |
|loss in subsequent periods | | |
+--------------------------------------+-------------------+-------------------+
| Available-for-sale financial assets| | |
|(fair value reserve): | | |
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
| Net change in fair value | -17,972| |
| | | 14,462|
| | | |
+--------------------------------------+-------------------+-------------------+
| Net amount transferred to profit or| -6,562| |
|loss | | -3,769|
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
| IAS 39 reclassification adjustment | 84| |
| | | 92|
| | | |
+--------------------------------------+-------------------+-------------------+
|Taxes related to components of other| 4,890| |
|comprehensive income | | -2,157|
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
|TOTAL COMPREHENSIVE INCOME FOR THE| 101,934| |
|PERIOD | | |
| | | |
| | | 123,880|
+--------------------------------------+-------------------+-------------------+
|Total comprehensive income| | |
|attributable to: | | |
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
| Equity holders of the parent| 101,820| |
|company | | 123,673|
| | | |
| | | |
+--------------------------------------+-------------------+-------------------+
| Non-controlling interest | 115| 207|
+--------------------------------------+-------------------+-------------------+
Municipality Finance Group
Capital Adequacy
Consolidated own funds
+--------------------------------------------+-----------+-----------+
|(EUR 1,000) |31 Dec 2015|31 Dec 2014|
+--------------------------------------------+-----------+-----------+
|Common Equity Tier 1 before adjustments | 692,573| 562,977|
| | | |
| | | |
| | | |
+--------------------------------------------+-----------+-----------+
|Adjustments to Common Equity Tier 1 | -6,244| -6,623|
+--------------------------------------------+-----------+-----------+
|COMMON EQUITY TIER 1 (CET1) | 686,329| 556,354|
+--------------------------------------------+-----------+-----------+
|Additional Tier 1 capital before adjustments| 347,454| 807|
| | | |
| | | |
+--------------------------------------------+-----------+-----------+
|Adjustments to Additional Tier 1 capital | -| -|
+--------------------------------------------+-----------+-----------+
|ADDITIONAL TIER 1 CAPITAL (AT1) | 347,454| 807|
+--------------------------------------------+-----------+-----------+
|TIER 1 CAPITAL (T1) | 1,033,782| 557,162|
+--------------------------------------------+-----------+-----------+
|Tier 2 capital before adjustments | 35,000| 65,914|
| | | |
| | | |
+--------------------------------------------+-----------+-----------+
|Adjustments to Tier 2 capital | -| -|
+--------------------------------------------+-----------+-----------+
|TIER 2 CAPITAL (T2) | 35,000| 65,914|
+--------------------------------------------+-----------+-----------+
|TOTAL OWN FUNDS | 1,068,782| 623,075|
+--------------------------------------------+-----------+-----------+
Consolidated key figures for capital adequacy
+------------------------------------------------------+-----------+-----------+
| |31 Dec 2015|31 Dec 2014|
+------------------------------------------------------+-----------+-----------+
|Ratio of Common Equity Tier 1 (CET1) to risk-weighted | 41.49| 29.94|
|assets, % | | |
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
|Ratio of Tier 1 capital (T1) to risk-weighted assets, | 62.49| 29.98|
|% | | |
+------------------------------------------------------+-----------+-----------+
|Ratio of total own funds to risk-weighted assets, % | 64.61| 33.53|
| | | |
| | | |
+------------------------------------------------------+-----------+-----------+
Consolidated minimum requirement for own funds
+--------------------+-------------+--------------+-------------+--------------+
|(EUR 1,000) | | 31 Dec 2015| | 31 Dec 2014|
+--------------------+-------------+--------------+-------------+--------------+
| | Total| Risk-weighted| Total| Risk-weighted|
| | exposure| assets| exposure| assets|
+--------------------+-------------+--------------+-------------+--------------+
|Credit and | 107,434| 1,342,928| 127,077| 1,588,468|
|counterparty risk, | | | | |
|standard method | | | | |
+--------------------+-------------+--------------+-------------+--------------+
|Exposures to | 368| 4,598| -| -|
|regional governments| | | | |
|or local authorities| | | | |
+--------------------+-------------+--------------+-------------+--------------+
|Exposures to | 1,367| 17,089| -| .|
|multilateral | | | | |
|development banks | | | | |
+--------------------+-------------+--------------+-------------+--------------+
|Exposures to | 69,645| 870,561| 77,840| 972,994|
|institutions | | | | |
+--------------------+-------------+--------------+-------------+--------------+
|Exposures to public | 3,320| 41,501| 1,367| 17,089|
|sector entities | | | | |
+--------------------+-------------+--------------+-------------+--------------+
|Exposures in the | 16,283| 203,542| 15,258| 190,731|
|form of covered | | | | |
|bonds | | | | |
+--------------------+-------------+--------------+-------------+--------------+
|Items representing | 15,743| 196,792| 27,028| 337,851|
|securitisation | | | | |
|positions | | | | |
+--------------------+-------------+--------------+-------------+--------------+
|Exposures in the | 108| 1,354| 101| 1,258|
|form of shares in | | | | |
|CIUs | | | | |
+--------------------+-------------+--------------+-------------+--------------+
|Other items | 599| 7,490| 5,484| 68,545|
+--------------------+-------------+--------------+-------------+--------------+
|Market risk | 47| 594| 6| 73|
+--------------------+-------------+--------------+-------------+--------------+
|Credit valuation | 1,009| 12,613| 1,586| 19,829|
|adjustment risk (CVA| | | | |
|VaR), standard | | | | |
|methos | | | | |
| | | | | |
+--------------------+-------------+--------------+-------------+--------------+
|Operational risk, | 23,851| 298,143| 19,994| 249,928|
|basic method | | | | |
+--------------------+-------------+--------------+-------------+--------------+
|TOTAL | 132,342| 1,654,278| 148,664| 1,858,298|
+--------------------+-------------+--------------+-------------+--------------+
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 34 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.
Read more: www.munifin.fi
Municipality Finance Plc
Jaakonkatu 3 A, PO Box 744
00101 Helsinki, Finland
Tel. +358 9 6803 5666
www.munifin.fi
firstname.lastname@munifin.fi
[HUG#1984701]
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