Values fall

State-owned British Business Bank swings to loss

BBB invests in small growth firms

The state-owned British Business Bank has posted a £147.3 million loss to the end of March but has insisted it is delivering value for money for UK taxpayers.

BBB was set up in 2014 to lend money to and buy stakes in smaller UK businesses and invested £1.6bn during the latest year.

The bank, which reported a profit of £604.8m in the previous year, said it had suffered from the erosion in the value of these investments.

They fell by £146m, or 5%, in the 12 months to the end of March. That compares to a gain of £619m in the previous year.

Chief executive Louis Taylor said UK taxpayers have “not lost any money” and that the bank generates “a good return for the taxpayer”.

He added: “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 the PA news agency.

“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.

BBB will launch its £150m Investment Fund for Scotland (IFS) at the Technology & Innovation Centre in Glasgow next week.

The fund will include a range of commercial finance options with smaller loans from £25,000 to £100,000; debt finance from £100,000 to £2m; and equity investment up to £5m. It will be available to businesses across Scotland, including rural, coastal and urban areas.

The event will include an opening address from Mr Taylor, and the announcement of the fund managers who will deliver the IFS.

The BBB is responsible for administering the government’s three Covid-19 loan schemes and its Future Fund, together responsible for delivering more than £80bn in finance to almost 1.7 million businesses. The schemes are now closed to new applications.

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