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HELSINKI - Municipality Finance Plc (MuniFin) reported an 11.9% year-over-year decline in net operating profit excluding unrealized fair value changes to €79 million for the first half of 2025, according to a press release published Monday.
The Finnish credit institution, which primarily finances municipalities and social housing projects, saw its net interest income fall 3.6% to €124 million compared to the same period last year. Higher expenses, particularly from IT system maintenance and development, contributed to the profit decline, with total costs rising to €44 million from €41 million a year earlier.
Despite market fluctuations, unrealized fair value changes had minimal impact on results, amounting to -€0.6 million compared to €16 million in the first half of 2024.
MuniFin maintained strong capital positions, with a CET1 capital ratio of 89.4% at the end of June, down from 107.7% at year-end 2024. The company attributed this decline partly to new CRR III rules applied on January 1, 2025, which reduced the capital ratio by approximately 10 percentage points, primarily due to increased credit valuation adjustment risk.
Long-term customer financing grew 3.7% to €37.1 billion, while new long-term customer financing remained stable at €2.41 billion. The company highlighted growth in its sustainable finance portfolio, with green and social finance increasing 12.3% to €10.5 billion, representing 28.3% of long-term customer financing.
For the full year, MuniFin expects net operating profit excluding unrealized fair value changes to be at the same level or lower than in 2024.
MuniFin is owned by Finnish municipalities, the public sector pension fund Keva, and the Finnish state.
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