State-owned British Business Bank reveals £147m annual loss
The government-owned British Business Bank has said UK taxpayers will feel the long-term benefits of plugging billions of pounds into small firms after revealing it swung to a loss of more than £147m last year.
The UK’s economic development bank said it was impacted by wider economic difficulties which led to a drop in the valuation of firms it invests in.
It reported a pre-tax loss for the year to the end of March of £147.3m, compared to a profit of £604.8m the previous year.
The bank, which lends money to and buys stakes in smaller UK businesses to help them start and grow, made £1.6bn worth of funding agreements during the latest year.
It brings the total funding to £12.4bn to more than 90,000 businesses since the bank’s launch in 2014. The total figure does not include the Covid-19 loans which were administered by the British Business Bank (BBB).
UK taxpayers, who back the bank, have “not lost any money”, chief executive Louis Taylor made clear.
Mr Taylor told the PA news agency: “I think we generate a good return for the taxpayer.
“These are long-term investments and we are confident that over time, when we actually realise these investments, they will yield profitable growth for us but also real social benefit for the economy.”
The bank said it had been affected by falls in the market valuations of companies, especially in the technology sector which saw valuations cut after the pandemic.
But it said the drop in valuations and a consequent loss was expected after investing more in recent years.
“I think our portfolio has been performing very well,” Mr Taylor told PA.
“It is not without its issues, and it is not without any defaults at all, but we are a risk-taking organisation.”
The bank’s Start Up Loans programme recently reached a milestone of £1bn in lending, with more than half the funding going to small businesses run by women and ethnic minorities.
The scheme targets underrepresented groups who are excluded from mainstream finance to help them start business, and regions outside of London and the South East.