CEO’s review

In many respects, 2017 was a good year for MuniFin and its customers. The Finnish economy was on a steep growth path: municipalities received more tax income than expected, which made their cash position stronger than anticipated.

The strong financial position of municipalities resulted in moderate growth in their demand for financing, while the demand for financing government-subsidised housing production grew distinctively along with general growth in the construction industry. The green finance launched in 2016 proved very popular, and the green project portfolio now exceeds one billion euros.

Despite the tighter competition for financing in Finland, MuniFin is still by far the largest provider of financing for the municipal sector and government-­subsidised housing production.

In 2017, the liquidity of international capital markets was high and MuniFin succeeded in its funding. To a large extent, this was due to the successful implementation of strategic benchmark bond transactions.

Among many changes taking place around us, our aim is to ensure the sustainability of our operations.

We recruited a record number of new employees in 2017 to meet future challenges and our customers’ changing needs. Growth is particularly taking place in the company’s development functions, which aim to offer new financing solutions and digital solutions to our customers, as well as improve our internal ­systems and processes. The goal is to make our organisation more agile and enhance its ability to change.

Responsibility has always been the core principle that steers operations at MuniFin. With the organisation growing rapidly and many external changes taking place around us, our aim has been to ensure the sustainability of our operations. That is why we put our efforts into ensuring responsible business conduct throughout the organisation, and as a result, 2017 saw the definition of MuniFin’s corporate responsibility principles.

The international markets are affected by a large ­number of uncertainty factors. In general, however, the markets are also expected to remain stable in 2018. In addition to open political issues, the key questions remain unanswered surrounding the schedules and effects of the controlled reduction of central bank asset purchase programmes.

Overall, positive economic growth in Finland is ­expected to continue in 2018. If this becomes a reality, it could mean that the demand for financing will remain at a moderate level. On the other hand, the operating environment has become more difficult to predict in recent years: it is also possible that ­municipalities make bolder growth investments when the economy is strong.

Esa Kallio
President and CEO
Municipality Finance Plc