British Business Bank back in black with £144 million profit

Times

6 days ago

Britain's state economic development agency has returned to profit, and its investment portfolio grew by almost a fifth, as it prepares for a beefed-up role after recent government changes.
The British Business Bank, established in 2014 to improve the flow of finance to private companies, generated a pre-tax profit of £144 million in its last financial year — after two consecutive years of losses, including a £131 million loss in the 12 months to March 2024 — boosted by the performance of its investments.
The bank provides wholesale finance to equity and debt providers but can also invest up to £60 million directly in individual companies.
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After the government's recent five-year spending review and industrial strategy, the agency's role has been significantly increased. The government committed £6.6 billion of new capital to the British Business Bank in June, taking its financial capacity to £25.6 billion.
Ministers are seeking to stimulate investment in promising UK companies to help drive economic growth and productivity and enable companies to scale up at home rather than overseas, particularly in the US.
The annual report for the bank, which has its headquarters in Sheffield, shows that its investment portfolio has increased in value by 19 per cent to £4.7 billion.
It supported a total of £6.8 billion of finance for smaller businesses, made up of £1.2 billion deployed by the agency, £2.6 billion of lending guaranteed and £3 billion of private sector capital that it 'crowded in'.
As a result, it said, 24,000 businesses that haven't previously been supported by the bank received funding, plus 4,000 that have previously benefited.
Louis Taylor, chief executive of the British Business Bank and a former boss of UK Export Finance, the government's export credit agency, said its activities from the last year were forecast to create 38,000 extra jobs and £8 billion of gross value added 'over the life of the finance'.
Taylor, 58, whose total pay was £460,800, added: 'We have undertaken a significant reshaping of our organisation to prepare for an expanded mandate and long-term ambitions. Having an economic development bank with permanent capital and a consistent risk appetite, underpinning the UK venture and growth market through its cycles, is a powerful and very positive development.'
Despite the market volatility generated by President Trump's tariffs war, the agency said it did not expect 'any direct impact' on its investment portfolio given its UK focus and it not being concentrated in sectors most exposed to US tariffs.
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The bank's expanded role includes the British Growth Partnership, an investment vehicle seeking to raise hundreds of millions of pounds from UK pension funds and other institutions to back British venture capital. For the first time, it will be managing capital on behalf of pension funds together with other institutional investors. Aegon UK, NatWest Cushon and London CIV, a grouping of local government pension schemes, have expressed interest in working with it.