The British Business Bank, the UK government’s economic development bank, has reported a loss of £135.3 million for 2022-23 in a year that it made a £1.6 billion of commitments.

The loss was due to “an expected drop in valuations” across the bank’s portfolio.

The bank’s core programmes support over £12.4 billion of finance to more than 90,000 smaller businesses.

The bank said it met its target for deployment of finance across the UK’s Nations and regions, deploying £1.27 billion of finance outside of London.

The bank said its existing regional funds – the Northern Powerhouse, Midlands Engine and Cornwall & Isles of Scilly Investment Funds – invested an additional £152 million.

“This comes ahead of the launch of our new Nations and Regions Investment Funds, which will deliver a £1.6bn commitment of new funding across Scotland, Wales, Northern Ireland, the South West, North of England and Midlands,” said the bank.

British Business Bank chair Robert Smith said: “There can be no doubt that the prevailing market conditions during 2022/23 have been both demanding and extraordinary.

“Our role, as the UK’s economic development bank, is especially important at the more difficult points of the economic cycle and this is why we have continued to invest during the last year.

“In doing so, we have built further our support for our ultimate end-customers – the UK’s smaller businesses.”

British Business Bank CEO Louis Taylor said: “The British Business Bank has continued to build momentum in 2022/23, making a total of £1.6bn of commitments despite the challenging economic environment.

“As reported in our 2022/23 Annual Report and Accounts, there has been an expected drop in valuations across our portfolio, producing a £135.3m loss this year.

“Given the longer-term 10-year horizon for most of our investments we would expect an overall upward trajectory despite these in-year fluctuations.

“After the pandemic, we have re-focused on the UK’s future economic growth as we deliver against our new strategic objectives from 2023/24.

“These are: driving sustainable growth, backing innovation, unlocking potential, and building the modern, green economy.

“We will continue to put our customers at the heart of everything we do, investing through the cycle to support the UK’s smaller businesses as they start up and grow.”