Kuntarahoitus Oyj - Company Announcement

Municipality Finance clearly passes ECB's stress test and moves under ECB's direct supervision

Municipality Finance Plc
Stock Exchange Release
14 November 2015

Municipality Finance clearly passes ECB's stress test and moves under ECB's
direct supervision

The European Central Bank (ECB) published its results on the comprehensive
assessment of Municipality Finance on Saturday November 14, 2015. The test
confirms the company's strong risk-bearing capacity. The comprehensive
assessment consisted of an asset quality review and a forward-looking stress
test. Municipality Finance's results stand well above the set thresholds.

Municipality Finance's Common Equity Tier 1 capital ratio (CET1) to risk-
weighted assets was 29.94 per cent at the end of 2014. Even after the ECB's most
adverse stress test scenario the same ratio was 20.77 per cent at the end of
2017. This is well above the 5.5 per cent threshold set by the ECB.

The ECB conducts comprehensive assessments of all Europe's largest financial
institutions. The examination process evaluates the resilience and positions of
credit institutions. Last year the assessment was conducted for the first time
and included a total of 130 European financial institutions. This year
additional nine organisations were assessed due to their increased systemic
significance.

When publishing the results of the comprehensive assessment, ECB also stated
that Municipality Finance will move under the ECB's direct supervision from the
beginning of 2016. This is a direct consequence of the company's systemic
significance.

More detailed facts about the assessment can be found at ECB's website at
www.ecb.europa.eu.

MUNICIPALITY FINANCE PLC

Further information:

Pekka Averio, President and CEO, tel. +358 500 406 856
Toni Heikkilä, Senior Vice President, CRO, tel. +358 50 3861 757

Measured by the group's balance sheet, Municipality Finance Plc (MuniFin) 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


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