British Business Bank reports £122m loss as valuations fall
The British Business Bank facilitated a record £2.3bn in small business finance in its latest financial year, but made a loss due to “challenging market conditions”.
This comprised £777m of debt commitments over the 2023/24 fiscal year, beating its target of £713m, and £1,527m of equity commitments, ahead of its target of £1,331m.
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Of the total, £1,782m was deployed outside of London versus a target of £1,080m.
The state development lender said that the commitments are expected to lead to the creation of 39,400 additional jobs and £8.4bn of gross value added over the life of the finance.
However, the Bank made a £122m loss over the year, which chief executive Louis Taylor (pictured) attributed to the challenging market for investments.
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“However, this is largely an unrealised loss, reflecting short-term falls in the book valuation of long-term investments, rather than actual cash losses,” he added. “Significantly, valuations remain 1.35 times our original cost, and we would expect them to rise further over their five-to-10-year investment period as we enter a period of recovery and economic growth.”
Stephen Welton, chair of the British Business Bank, said: “This is an especially exciting time in the Bank’s development, with more being asked of us at a time when driving longer-term investment to support the growth economy is so critical. This is testament to what we have built over the last 10 years.
“After a strong year for the Bank in challenging markets, I look forward to working with the board and the executive leadership team, and other key stakeholders, as we look to increase the scale, effectiveness and impact of the Bank, crowding in private investment and institutional capital for innovative, high growth firms to boost economic growth across the UK.”
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