National Investment Bank ups commitments to £445m

Willie Watt, chair, Scottish National Investment Bank

The Scottish National Investment Bank said it has “evolved into an ambitious, active impact investor” as it published its second full year accounts.

The bank said that in a little over two years since it was established, it has committed over £445 million of long-term strategic investment.

“A further £703 million has been attracted in from other sources, ensuring the Scottish economy has benefitted from well over £1.1 billion of support,” said the bank.

Scottish National Investment Bank CEO Al Denholm said: “These results show strong progress for The Bank with revenue increasing 463% to £10.7 million over the past 12 months, while there was a 55.5% increase in committed investment of £220.7 million.”

“I believe we can become one of the most respected impact investors in the industry, generating social, environmental and economic returns for the people of Scotland.

“I look forward to working with the team and our many stakeholders, on delivering the bank’s missions on behalf of the people of Scotland.”

The bank said the number of jobs supported by investee business have reached 2,300, and 100% of businesses have committed to Fair Work First principles.

“While delivering impact and commercial returns from its investments, as a development bank it also adopts a higher risk appetite than other investors,” said the bank.

“Risk is based on the measured judgement of the investment team and is considered throughout the investment decision making process.

“An unrealised loss of £17.8 million has been recognised in the financial year, the majority relates to adjustments which reflect the underlying performance of investee companies.

“This includes a £4.5m unrealised loss recognised on Circularity Scotland Limited for the financial year ending March 31st 2023.

“The bank is still in early stages, being only two years old.

“As a patient capital investor, the bank will look at opportunities and returns over the long term and while it is inevitable that not all of our investments will deliver a positive return, with this long-term view, fluctuation is expected within the portfolio.”

The Scottish National Investment Bank is Scotland’s first development investment bank, wholly owned by the Scottish Ministers on behalf of the people of Scotland.

The Scottish Government has committed to capitalising the bank with £2 billion in its first 10 years.

The bank’s chairman Willie Watt said: “Our capacity as an organisation to deliver insight, investment and impact has grown significantly.

“As an institution we are moving out of our start-up phase and are becoming an increasingly established organisation, delivering solidly against our business plans.

“The overall economic climate has been challenging for companies seeking to raise investment.

“As a development bank with a particular focus on long-term and strategic investment, we have worked to support innovative, growth-oriented businesses to navigate these conditions while delivering on their ambitious business strategies.

“Despite incurring our first investment loss after the end of this financial year, we continue to work towards a positive net return across our portfolio as a whole, demonstrating both responsible and productive stewardship of public capital.”