Kuntarahoitus Oyj - Financial Statement Release

FINANCIAL STATEMENTS BULLETIN

FINANCIAL STATEMENTS BULLETIN                                                   
Municipality Finance Plc                                                        
For publication on March 3, 2010                                                


Municipality Finance Plc ensured funding for municipalities and rental unit     
production                                                                      

Municipality Finance Plc's loan portfolio increased by 29% in 2009, totalling   
EUR 9,741 million at the end of the year (Dec. 31, 2008: EUR 7,567 million). New
loans issued amounted to a record amount of EUR 2,940 million (2008: EUR 1,683  
million). In challenging market conditions, the company was practically the sole
provider of financing for municipalities, municipal federations and             
state-subsidised housing production.                                            

“2009 was an eventful financial year for Municipality Finance Group. Despite the
general economic instability, the year will be remembered for successful        
business operations, a share issue, and a revision of organisational structure  
and strategy. Our loan portfolio increased significantly, there was a marked    
improvement in profitability, funding acquisition was successful and our balance
sheet grew to exceed EUR 14,000 million. The profit of EUR 34 million for the   
period is the best in the history of our company,” says CEO Pekka Averio.       

The balance sheet of Municipality Finance Group grew by 16%, reaching EUR 14,557
million at the end of 2009 (Dec. 31, 2008: EUR 12,512 million). Capital adequacy
stood at 20.17% at the end of 2009 (Dec. 31, 2008: 13.60%). The Group's net     
operating profit before taxes for the financial period was EUR 33.7 million     
(2008: EUR 2.7 million). Net interest income grew to EUR 50.6 million,          
representing a 71% increase on the previous year (EUR 29.5 million in 2008).    

Successful funding acquisition                                                  
Despite the prevailing uncertainty in the markets in early 2009, Municipality   
Finance was successful in its funding acquisition. A new record was set in      
funding acquisition with a total of EUR 5,789 million for the year (2008: EUR   
4,527 million). The total amount of funding acquisition grew to EUR 13,218      
million (2008: EUR 11,336 million).                                             

In January 2010, Municipality Finance received significant and highly valued    
recognition for its work in the international capital markets. Large            
international banks selected the company the Market Choice SSA Issuer of the    
Year in a vote organised by MTN-i. The voters highlighted the reliable, fast and
flexible manner in which Municipality Finance operates in the markets as the    
justification for the award.                                                    

The best credit ratings                                                         
The two important credit rating agencies, Standard & Poor's and Moody's,        
confirmed the best possible credit ratings for Municipality Finance Plc during  
the financial year. Municipality Finance Plc is the only Finnish credit         
institution with the same ratings as the Republic of Finland.                   

“One of the things that contributed to ensuring adequate financing for the      
Finnish local government sector was the sector's financial position - one of the
strongest in Europe - which was also highlighted by the credit rating agencies,”
states Municipality Finance's CEO Pekka Averio. In addition, Pekka Averio draws 
attention to Moody´s citing the professionalism of Municipality Finance's staff 
and operating model, adding: “We are also proud of the areas the agencies       
singled out for special mention, commending us for our conservative risk        
management policies.”                                                           

Prospects for 2010                                                              
“The local government economy continues to face significant challenges under the
prevailing weak general economic conditions. The severe employment situation    
leads to lower tax revenues and makes balancing the books difficult.            
Cutting back on municipal investment due to this reason, however, is hardly     
conducive to long-term development. In particular, maintaining repair           
investments pays off and financing them is ensured by Municipality Finance's    
diverse resources that enable it to offer lending to municipalities now and in  
the future,” says Pekka Averio.                                                 

“Our key strategic objective is to ensure capital adequacy through profitable   
growth, which will allow us to carry out our mission to offer financial services
to municipalities under all circumstances. Based on our strategy, we are also   
developing new services and products to respond to customer needs. We are       
entering a new service category in leasing finance, with the aim of creating    
more competition on the leasing finance markets and thereby reducing            
municipalities' investment costs,” Averio continues.                            

Further information:                                                            
Pekka Averio, CEO, tel. +358 (0)9 6803 6211, +358 (0)500 406 856                
Esa Kallio, Executive Vice President, tel. +358 (0)9 6803 6231, +358 (0)50 337  
7953                                                                            

Municipality Finance's full financial statements for 2009 are available on the  
company's website at www.kuntarahoitus.fi.                                      


Municipality Finance Plc is a local government credit institution owned by      
Finnish municipalities, the Local Government Pensions Institution and the       
Government and is the parent company of the Municipality Finance Group. The     
company's mission is to ensure top-value financial services for its clients, to 
be efficient and to grow profitably. The Group's balance sheet totalled EUR     
14,557 million on December 31, 2009. The company offers market-based funding to 
municipalities and municipal federations, to municipality-controlled entities   
and non-profit housing corporations. The company's funding, which is guaranteed 
by the Municipal Guarantee Board, is obtained from international capital markets
and domestic investors. Funding provided by the company goes into social and    
non-profit service projects, such as schools, housing and hospitals. The Group  
includes Financial Advisory Services Inspira Ltd, which offers financial        
advisory services for investments, financial and asset arrangements, asset      
management and various analysis services.

Attachments:

financial report_2009.doc