2018-08-14 15:00:00 CEST
2018-08-14 15:00:29 CEST
REGULATED INFORMATION
Kuntarahoitus Oy - Half Year financial report
Municipality Finance Plc Half year report January-June 2018: Steady results progress continued
Municipality Finance Plc
Half year report
14 August 2018 at 4:00pm (EET)
Municipality Finance Plc Half year report January-June 2018: Steady results
progress continued
This release is a summary of Municipality Finance's Half year report published
on 14 August 2018. The complete Half year report with tables is attached to this
release and available at www.munifin.fi.
The first half of 2018 in brief
* The Group's net interest income grew by 6.7% compared to the previous year
reaching EUR 118.0 million (1 January-30 June 2017: EUR 110.6 million).
* The Group's net operating profit without unrealised fair value changes grew
by 4.3% totalling EUR 92.7 million at the end of the reporting period (1
January-30 June 2017: EUR 88.9 million). Including these valuations the net
operating profit amounted to EUR 124.4 million (1 January-30 June 2017: EUR
95.9 million).
* The balance sheet total was EUR 35,521 million (31 December 2017: EUR
34,738 million). The growth compared to the end of 2017 was 2.3%.
* The Group's capital adequacy remained strong, with the ratio of own funds to
risk-weighted assets being 72.41% at the end of June (31 December
2017: 75.51%).
* At the end of June, the Group's leverage ratio amounted to 3.97% (31
December 2017: 3.84%).
* The total of new loans withdrawn in January-June amounted to EUR 1,239
million (1 January-30 June 2017: EUR 1,046 million). The lending portfolio
stood at EUR 21,508 million (31 December 2017: EUR 21,219 million). Of this
amount, EUR 138 million was granted as green finance targeted for
environmental-friendly investments during the first half of the year (1
January-30 June 2017: EUR 277 million). At the end of June 2018 the
portfolio of reimbursed green finance stood at EUR 917 million (31 December
2017: EUR 803 million).
* The leasing portfolio stood at EUR 511 million at the end of June 2018 (31
December 2017: EUR 432 million).
* In January-June, EUR 4,100 million was acquired in long-term funding (1
January-30 June 2017: EUR 5,411 million). A total of EUR 7,994 million was
issued in short-term debt instruments under the Euro Commercial paper
programme during the first half of the year (1 January-30 June 2017: EUR
4,305 million). The total amount of funding grew to EUR 30,633 million (31
December 2017: EUR 30,153 million).
* At the end of June, total liquidity was EUR 9,273 million (31 December
2017: EUR 9,325 million).
President and CEO of MuniFin, Esa Kallio:
"Good economic development in Finland continued in the first half of 2018. The
situation is looking good from various perspectives. The finances of
municipalities seem stable and government-supported construction continues with
strong volumes. It would appear that there is a wide societal interest for
Finland to support the economic growth that is picking up steam after a long
period of slow growth. The conciliatory and fast concluded collective labour
agreement rounds were good manifestations of this.
In the first half of the year, MuniFin's market position was strengthened
particularly in government-supported housing production. Even with the current
large volume of privately financed housing production, there continues to be a
steady demand for construction financed by the Housing Finance and Development
Centre of Finland. This ensures the availability of moderate-priced housing
production, especially in growth centres, which is a prerequisite for continued
economic growth.
The supply of financing has remained at a good level. However, MuniFin's
efficient funding has enabled us to strengthen our market position: we are still
the clear market leader in the financing of both municipal customers and
government-supported housing production. Despite the competition, the company's
net interest income and financial result remained at a good level in the first
half of the year.
The trends in the international capital markets served MuniFin well in the first
half of the year. Despite the customs disputes between the US and the other
markets, the increased tension in the relationships between superpowers and the
political crisis in Italy, we did extremely well in our funding transactions.
Our benchmark bonds were exceptionally sought-after by international investors.
This proves that the investors have a strong and continued confidence in us and
the Finnish society."
Key figures (group)
+-----------------------------------+------------+----------------+------------+
| |30 June 2018|31 December 2017|30 June 2017|
+-----------------------------------+------------+----------------+------------+
|Net interest income (EUR million) | 118.0| 228.5| 110.6|
+-----------------------------------+------------+----------------+------------+
|Net operating profit (EUR million) | 124.4| 198.4| 95.9|
+-----------------------------------+------------+----------------+------------+
|Net operating profit without| 92.7| | 88.9|
|unrealised changes in fair value| | 187.4| |
|(EUR million) | | | |
+-----------------------------------+------------+----------------+------------+
|New loans issued (EUR million) | 1,239| 2,439| 1,046|
+-----------------------------------+------------+----------------+------------+
|New funding acquisition (EUR| 4,100| 9,557| 5,411|
|million) | | | |
+-----------------------------------+------------+----------------+------------+
|Balance sheet total (EUR million) | 35,521| 34,738| 33,793|
+-----------------------------------+------------+----------------+------------+
|Common Equity Tier 1 (CET1) (EUR| 1,016| 946| 870|
|million) | | | |
+-----------------------------------+------------+----------------+------------+
|Tier 1 capital (EUR million) | 1,363| 1,293| 1,218|
+-----------------------------------+------------+----------------+------------+
|Total own funds (EUR million) | 1,363| 1,293| 1,218|
+-----------------------------------+------------+----------------+------------+
|Ratio of Common Equity Tier 1 | 53.95| 55.22| 51.83|
|(CET1) to risk-weighted assets, % | | | |
+-----------------------------------+------------+----------------+------------+
|Ratio of Tier 1 capital (T1) to | 72.41| 75.51| 72.52|
|risk-weighted assets, % | | | |
+-----------------------------------+------------+----------------+------------+
|Ratio of total own funds to risk- | 72.41| 75.51| 72.52|
|weighted assets (%) | | | |
+-----------------------------------+------------+----------------+------------+
|Leverage ratio (%) | 3.97| 3.84| 3.72|
+-----------------------------------+------------+----------------+------------+
|Return on equity (ROE) (%) | 14.56| 12.57| 12.57|
+-----------------------------------+------------+----------------+------------+
|Cost-to-income ratio | 0.17| 0.18| 0.19|
+-----------------------------------+------------+----------------+------------+
|Personnel | 147| 134| 119|
+-----------------------------------+------------+----------------+------------+
MUNICIPALITY FINANCE PLC
Further information:
President and CEO Esa Kallio, tel. +358 50 337 7953
CFO, Executive Vice President Marjo Tomminen, tel. +358 50 386 1764
Measured by the balance sheet, MuniFin (Municipality Finance Plc) is Finland's
second largest credit institution: the company's balance sheet exceeds EUR 35
billion. The company is owned by Finnish municipalities, the public sector
pension fund Keva and the Republic of Finland.
MuniFin's mission is to build a better future in line with the principles of
responsibility and in cooperation with its customers. MuniFin's 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 centres, schools and day care
centres, and homes for people with special needs.
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 and the first Finnish green bond issuer. 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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