British Business Bank posts second straight loss as tech valuations struggle

State-owned lender the British Business Bank has recorded a second straight annual loss as a decline in start-up valuations weighed on its financial performance.

The bank, which aims to boost the economy by investing in smaller UK firms, posted a £122m loss for the financial year to the end of March, after already losing £135m the year before.

The results underscore a wider downturn in private valuations, particularly in the technology sector, since the end of the Covid-19 pandemic.

The bank saw a £453m profit in 2022 but on Thursday a £162m fall in the value of its investments over the previous financial year.

Louis Taylor, the British Business Bank’s chief executive, said the lender had “performed above expectations overall in what were very difficult market conditions” and that unrealised losses marked “short-term falls in the book valuation of long-term investments, rather than actual cash losses”.

The British Business Bank, which committed a record £2.3bn in funding in 2023/24, said in an impact report that its work last year would support almost 40,000 new jobs and add £8.4bn to the UK economy.

Labour chancellor Rachel Reeves said last month that the British Business Bank and UK Infrastructure Bank would become aligned under a new National Wealth Fund to be launched with £7.3bn of state funding.

Elsewhere, the bank is exploring ways to boost institutional investment in the UK through a new fund for pension schemes and asset managers to invest in private companies.

“We have been asked to actively explore how the bank could do more to crowd in private investment,” Stephen Welton, the bank’s chair, said on Thursday.

“I am confident of the benefits that this work may potentially bring to the economy and growth companies across the country.”