O-SII buffer requirement of MuniFin is subject to change; additional systemic risk buffer set

Municipality Finance Plc
Stock exchange release
29 June 2018 at 3.05 p.m. (EET)

O-SII buffer requirement of MuniFin is subject to change; additional systemic risk buffer set

The Finnish Financial Supervisory Authority (FIN-FSA) has revised the additional capital requirement for Municipality Finance Plc as a credit institution significant for the Finnish financial system (O-SII) in its meeting of 29 June 2018. The new O-SII buffer requirement of 0.5% will take effect on 1 January 2019.

The O-SII buffer requirement for MuniFin is also currently 0.5%. However, based on the decision of the FIN-FSA in December 2017, the buffer requirement will raise to 1.0% effective 1 July 2018. The next revision, effective from the beginning of 2019, is linked with Nordea’s plan to transfer its domicile to Helsinki on 1 November 2018. A condition for the decision to enter into effect as regards applying the systemic risk buffer to Nordea-group is that Sweden’s competent authority does not oppose the merger of Nordea Bank AB with Nordea Holding Oyj.

On 29 June the FIN-FSA also decided to impose a systemic risk buffer requirement on MuniFin on the basis of the structural characteristics of the financial system. The buffer set by the FIN-FSA is 1.5% and it will be covered by common equity tier 1 capital (CET1).

MuniFin clearly meets all capital requirements set to it.

More information on FIN-FSA’s decisions at www.finanssivalvonta.fi.

MUNICIPALITY FINANCE PLC

Esa Kallio, President and CEO
tel. +358 50 337 753

Measured by the balance sheet, MuniFin (Municipality Finance Plc) is Finland’s second largest credit institution: the company’s balance sheet totals nearly EUR 35 billion. The company is owned by Finnish municipalities, the public sector pension fund Keva and the Republic of Finland.

MuniFin’s mission is to build a better future in line with the principles of responsibility and in cooperation with its customers. MuniFin’s 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 centres, schools and day care centres, and homes for people with special needs.

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 and the first Finnish green bond issuer. The funding is exclusively guaranteed by the Municipal Guarantee Board.

The Municipality Finance Group also includes the subsidiary company, Financial Advisory Services Inspira Ltd.