British Business Bank Reports Annual Loss Amid Economic Challenges

British Business Bank Reports image

The publicly-owned British Business Bank (BBB) has recorded an annual pre-tax loss exceeding £147 million, citing broader economic issues that have led to a devaluation of its invested businesses.

The economic development lender highlights that these economic challenges did not deter it from entering into £1.6 billion worth of funding agreements throughout the year, despite the challenging economic climate.

Established in 2014, British Business Bank (BBB’s) mission is to provide financing and acquire stakes in smaller UK businesses, aiding their initiation and expansion.

BBB notes a decline in the value of its investments by £146 million, constituting a 5% reduction over the 12-month period ending in March. This stands in stark contrast to the previous year, when the bank experienced a gain of £619 million.

Across the globe, technology firm valuations have faced a downturn in recent months, with investors becoming increasingly cautious due to rising borrowing costs and sluggish economic growth.

Louis Taylor, CEO of the bank, emphasised that despite fluctuations within a given year, BBB’s long-term perspective spans ten years, during which an overall upward trajectory is anticipated for most investments.

The bank’s total funding portfolio currently amounts to £12.4 billion, benefiting over 90,000 businesses, surpassing its target of £10.7 billion. It’s important to note that this figure excludes the coronavirus loans administered by BBB.

Additionally, BBB plays a significant role in managing the government’s COVID-19 loan schemes and the Future Fund. These initiatives have collectively provided over £80 billion in financial assistance to nearly 1.7 million businesses, although new applications for these schemes are no longer accepted.

The Future Fund attracted public attention for allocating taxpayer funds to various entities, including Bolton Wanderers Football Club and the event organiser, Killing Kittens.

BBB’s Start-Up Loans programme has recently achieved a significant milestone, with over £1 billion in lending, of which more than half has been directed towards small businesses led by women and ethnic minorities.

This programme is designed to support underrepresented groups that often face exclusion from mainstream lenders, especially in regions outside of London and southeast England. Notably, the majority of funding for this programme is secured from lenders outside of the UK’s “big five” banks.

Leave a Reply

Your email address will not be published. Required fields are marked *