The Scottish Government has published its statutory first 5-year review of the Scottish National Investment Bank’s performance, conducted by Edinburgh Airport chairman John Elvidge.

The report said that to date, the Bank has committed a total of £1.16 billion with 53 live investments — 31% in debt, 34% in combined debt and equity, and 10% in equity — and it has invested 25% in funds. It has yet to “issue any guarantees.”

The Bank has so far deployed over half of the £2 billion in capital funding that has been committed to 2030.

Elvidge said that “having to operate in the marketplace without certainty as to the existence of the organisation beyond 2030 is presenting increasing challenges in terms of forming and managing long-term relationships of trust and confidence with investees and co-investors alike …”

Elvidge wrote: “There is now urgency to resolve these interlinked issues. I heard compelling evidence that there will be negative consequences if the Bank’s ability to be a reliable source of long-term and repeat funding is not clearly established and understood externally within the next year or so …

“It will require action by both the Scottish and UK Governments to give the Bank the ability to manage, retain, carry forward and redeploy cash balances across years; and also to raise capital in its own right, so that it is no longer reliant on continuing capital advances from the Scottish Government beyond 2030 …

“I understand that in recent months there have been productive discussions on these questions between the Bank, the Scottish Government and HM Treasury; and I note the shared statement of intent from outgoing Scottish Ministers and the Bank to the Parliament in March 2026.

“It would be very helpful if incoming Ministers could now set out a clear plan of action and timetable with a view to securing the necessary agreement by early 2027 …

“One strategic issue which has been raised in the course of my review is whether the £2 billion capitalisation to which the Scottish Government committed by 2030 would be sufficient for the longer term …

“… the Bank’s leadership has the long-run ambition to create a significantly larger balance sheet than the £2 billion capitalisation from the Scottish Government …

“The only way the Bank could achieve such growth would be to attract significant volumes of additional capital from the private sector, over and above crowding-in on individual Bank investments. The Bank has the ambition to do this by creating new funds in which private sector investors could participate …

“This would require further authorisations from the Financial Conduct Authority; and it would also need the Bank to be able to satisfy investors as well as regulators that it has full independence from Ministers; has a stable long-term future; that it has strong credibility and expertise as an organisation; and that it has access to a sufficient number and range of investible propositions that are not visible or available elsewhere …

“The Bank’s performance over its first five years has gone some way towards establishing a platform on these points. Depending on how it evolves, the Bank’s expanded activity in the area of housing may further strengthen its position.

“And the way the Bank develops its current proposals for a university spinout fund will be an important test, both of its attractiveness to private investors and also of the extent to which the Bank and Scottish Enterprise are able to develop a strong, clear, credible, and mutually complementary partnership approach in this area.

“The need for the Scottish Government to take action soon, in collaboration with the UK Government, to set the Bank on course to become a permanent feature of the Scottish financial landscape is clear, and is crucial to creating the conditions for the Bank’s future success.

“But in the near term, and as a matter of strategic priority, the Scottish Government also needs to decide and give a clear steer on where, how and how far it wants the Bank to pursue the third party capital route.”

On the Bank’s losses, Elvidge reported: “It is in the nature of things that not all investments will succeed – particularly since the Bank is seeking to invest in propositions that might not otherwise take flight.

“And it is a fact that failed investments generally materialise more quickly than major successes, especially when the Bank is investing for the longer term. It is also worth noting that there have been serious economic headwinds since the Bank was established …

“Up to the end of 2025-26, losses of £73 million had been crystallised across four investees. Further losses of up to £37 million are expected to arise from two investees who have entered administration or liquidation; and since the last year-end accounts, there is an additional sum of as yet unrealised losses, although these have yet to crystallise.

“The Bank will provide updated figures and explanation in its annual report and accounts due to be published in August.”

Stephen Flynn, Cabinet Secretary for Economy, said: “The review concludes that the Bank has made strong progress since its inception, deploying over half of the £2 billion in capital funding that has been committed to 2030.

“It has successfully established itself as a mission-led development bank and has already made an important contribution in supporting investment across Scotland. The findings reinforce those of Audit Scotland’s report published in May 2025.

“The review also identifies clear opportunities for both the Bank and the Scottish Government to build on that foundation and strengthen the Bank’s contribution to Scotland’s economic, social and environmental ambitions over the years ahead.

“The Scottish Government accepts the broad conclusions of the review. We welcome the recognition of the positive and constructive relationship that has been established between the Government and the Bank, including our commitment to respecting the Bank’s operational independence while providing strategic direction through its missions and shareholder arrangements.

“We are committed to taking forward the recommendations directed towards the Scottish Government …

“The review also identifies a number of recommendations for the Bank itself. These include actions relating to governance, strategic communication, risk appetite, investment processes and ecosystem engagement.

“The Scottish Government has discussed the review’s findings with the Bank and agrees on the key areas for action.

“Together, we are developing a clear plan to take forward the recommendations, many of which are already underway, with defined responsibilities and timescales.

“The next phase of development will focus on maximising the Bank’s impact, helping more businesses to scale up and innovate, unlocking investment in housing and infrastructure, and supporting the creation of high-quality jobs across Scotland.

“We will continue to work closely with the Bank to ensure it delivers on its missions for the people of Scotland.”

Scottish National Investment Bank chair Willie Watt said: “The review recognises the scale of what has been achieved since the Bank was established. Over the past five years, we have built a new institution in a period marked by significant economic uncertainty and change, while remaining focused on delivering long-term impact for Scotland.

“Importantly, the review not only reflects on our progress to date but also provides thoughtful recommendations to help shape the Bank’s future development. We are encouraged that many of its themes align closely with the direction set out in our recently published Investment Strategy and Business Plan.

“While strong progress has been made, we recognise that there is more to do. We are committed to learning from the review, building on our strengths and continuing to evolve as an institution delivering lasting economic and social impact for Scotland.”