2016-08-10 14:30:18 CEST
2016-08-10 14:30:18 CEST
REGULATED INFORMATION
Kuntarahoitus Oyj - Half Year financial report
Municipality Finance Plc Half year report January-June 2016
Municipality Finance Plc
Half year report
10 August 2016 at 15:30 (EET)
Municipality Finance Plc Half year report January-June 2016
This release is a summary of Municipality Finance's Half year report published
on 10 August 2016. The complete Half year report with tables is attached to this
release and available at www.munifin.fi.
January-June 2016 in brief:
* The Group's net operating profit amounted to EUR 68.8 million (1 January-30
June 2015: EUR 78.3 million). This represents a 12.1% decrease from the
previous year. The change was effected especially by the supervisory and
stability fees paid to banking authorities, the growth of operating costs
resulting from the changes in the operating environment and unrealised
negative changes in the fair value of financial items.
* The Group's net interest income grew by 16.0% compared to the previous year,
reaching EUR 97.5 million (1 January-30 June 2015: EUR 84.1 million).
* The balance sheet total was EUR 35,850 million (31 December 2015: EUR
33,889 million). The growth compared to the end of 2015 was 5.8%.
* The Group's capital adequacy remained strong, with the ratio of own funds to
risk-weighted assets being 66.99% at the end of June (31 December
2015: 64.61%) and the ratio of Tier 1 capital to riskweighted assets being
45.33% (31 December 2015: 41.49%).
* At the end of June, the Group's leverage ratio amounted to 3.19% (31
December 2015: 3.15%).
* New loans withdrawn in January-June amounted to EUR 1,495 million (1
January-30 June 2015: EUR 1,173 million). The lending portfolio increased to
EUR 20,513 million (31 December 2015: EUR 20,088 million). The increase in
the total lending portfolio was 2.1% since the end of 2015.
* Total funding acquisition from January-June amounted to EUR 4,249 million (1
January-30 June 2015: EUR 4,518 million). The funding portfolio increased to
EUR 30,255 million (31 December 2015: EUR 28,419 million). The increase in
the total funding portfolio was 6.5% since the end of 2015.
* The total amount of liquid assets at the end of June was EUR 8,737 million
(31 December 2015: EUR 7,732 million).
* The turnover of MuniFin's subsidiary Inspira was EUR 1.1 million (1 January-
30 June 2015: EUR 1.3 million). Net operating profit at the end of June was
EUR 0.1 million (1 January-30 June 2015: EUR 0.2 million).
President and CEO of MuniFin, Pekka Averio:
"During the first half of 2016, the operating environment of MuniFin was
characterised by constant change. The haziness concerning the final content,
implementation method and impact of the Health, social services and regional
government reform cannot but be reflected in the municipal sector as a whole. At
the European level, the UK's decision to leave the European Union considerably
weakens the entire continent's economic outlook and increases financial
instability.
The uncertainty of the customers' operating environments had a surprisingly
marginal impact on MuniFin's operations. In the first half of 2016, we have
strengthened our position among our customers compared to the previous year.
The Municipality Finance Group's net operating profit amounted to EUR 68.8
million which represents a 12.1% decrease from the previous year. The change was
effected especially by the supervisory and stability fees paid to banking
authorities, the growth of operating costs resulting from the changes in the
operating environment and unrealised negative changes in the fair value of
financial items. Since 1 January 2016, MuniFin has been under the supervision of
the European Central Bank (ECB).
Continuing to rise, the company's balance sheet total was EUR 35.9 billion. A
strong performance and financial position benefits our customers and
shareholders in particular. They allow us to fulfil the duties set for us by the
owners: to secure the continuity of financing to our customers under all market
conditions. They also make it easier for us to operate under strict banking
regulations and help keeping our investor demand strong in a world that is
becoming more and more insecure.
Our significant role in society comes with great responsibility. We seek through
every means possible to secure our ability to provide financing to social and
health service projects of the new Finnish regions emerging through the
restructuring of local government and to safeguard the investment capability of
municipalities in their new roles."
Key figures (Consolidated)
+------------------------------------------+-----------+-----------+-----------+
| |30 Jun 2016|31 Dec 2015|30 Jun 2016|
+------------------------------------------+-----------+-----------+-----------+
|Net interest income (EUR million) | 97.5| 172.2| 84.1|
+------------------------------------------+-----------+-----------+-----------+
|Net operating profit (EUR million) | 68.8| 151.8| 78.3|
+------------------------------------------+-----------+-----------+-----------+
|New loans issued (EUR million) | 1,495| 2,687| 1,173|
+------------------------------------------+-----------+-----------+-----------+
|New long-term funding (EUR million) | 4,249| 7,297| 4,518|
+------------------------------------------+-----------+-----------+-----------+
|Balance sheet total (EUR million) | 35,850| 33,889| 33,693|
+------------------------------------------+-----------+-----------+-----------+
|CET1 capital (EUR million) | 727.1| 686.3| 647.5|
+------------------------------------------+-----------+-----------+-----------+
|Tier 1 capital (EUR million) | 1,074.5| 1,033.8| 647.5|
+------------------------------------------+-----------+-----------+-----------+
|Total own funds (EUR million) | 1,074.5| 1,068.8| 682.5|
+------------------------------------------+-----------+-----------+-----------+
|Ratio of CET1 capital to risk-weighted | 45.33| 41.49| 30.12|
|assets, % | | | |
+------------------------------------------+-----------+-----------+-----------+
|Ratio of Tier 1 capital to risk-weighted | 66.99| 62.49| 30.12|
|assets, % | | | |
+------------------------------------------+-----------+-----------+-----------+
|Ratio of total own funds to risk-weighted | 66.99| 64.61| 31.75|
|assets, % | | | |
+------------------------------------------+-----------+-----------+-----------+
|Leverage ratio, % | 3.19| 3.15| 1.9|
+------------------------------------------+-----------+-----------+-----------+
|Return on equity (ROE), % | 10.31| 14.84| 20.06|
+------------------------------------------+-----------+-----------+-----------+
|Cost-to-income ratio | 0.22| 0.16| 0.15|
+------------------------------------------+-----------+-----------+-----------+
|Personnel | 107| 95| 94|
+------------------------------------------+-----------+-----------+-----------+
MUNICIPALITY FINANCE PLC
Further information:
Pekka Averio, President and CEO, tel. +358 500 406 856
Esa Kallio, Executive Vice President, Deputy to the CEO, tel. +358 50 3377 953
Marjo Tomminen, CFO, Executive Vice President, tel. +358 50 3861 764
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 36 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
[HUG#2034342]
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