Municipality Finance Plc Stock Exchange Release February 11, 2019 at 4.00 PM (EET)

Municipality Finance's capital adequacy clearly fulfils the ECB requirements

As part of the yearly Supervisory Review and Evaluation Process (SREP), the European Central Bank (ECB) has decided that Municipality Finance shall fulfil the capital adequacy requirements imposed on it.

At the same time the Central Bank has imposed new CET1 capital buffer requirements for Municipality Finance, required to be held in excess of the regulatory minimum own funds requirement of 8%. The additional CET1 capital buffer requirement (P2R) for MuniFin is 2.25 percent. The requirement is effective on March 1, 2019.

The group's capital adequacy ratio exceeds by many times the requirement. At the end of June 2018, the group's ratio of CET1 to risk-weighted assets was 61.01 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 one of Finland's largest credit institutions: 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 is an integral part of the Finnish public economy.

MuniFin's mission is to help its customers thrive in changing circumstances. The company ensures competitive funding for its customers in all market conditions. Its 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 centers, schools and day care centers, and homes for the elderly.

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. 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