Kuntarahoitus Oyj - Company Announcement

Municipality Finance's capital adequacy exceeds by many times the ECB's new minimum requirement

Municipality Finance Plc
Stock Exchange Release
1 December 2016 at 1:30 PM (EET)

Municipality Finance's capital adequacy exceeds by many times the ECB's new
minimum requirement

The European Central Bank (ECB) has imposed new CET1 capital buffer requirements
for the credit institutions under its supervision. The new requirements will be
effective on 1 January 2017.

As part of the yearly SREP (Supervisory Review and Evaluation Process) decision
on MuniFin, the ECB imposed an additional 1.5 percent CET1 capital buffer
requirement (P2R), together with a 4.2 percent capital adequacy guidance (P2G).

Taking the existing capital buffer requirements into consideration, the total
new minimum requirement set on Municipality Finance's CET1 ratio is 13.2 per
cent. The company's capital adequacy ratio exceeds by many times the new
requirement. At the end of June 2016, the consolidated CET1 ratio of
Municipality Finance was 45.33 per cent and that of the parent company 45.49
percent.

The continuous SREP process is part of banking supervision activities carried by
ECP. The banking supervision aims to ensure the quality of risk management
methods, the capital adequacy and liquidity of credit institutions.

MUNICIPALITY FINANCE PLC

Marjo Tomminen
Executive Vice President, CFO
Tel. +358 50 386 1764

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




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