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.