SNIB losses soar in ‘challenging environment’ – Daily Business

Scottish National Investment Bank saw its pre-tax loss to the end of March soar to £58.43 million from £14.6m last time after unrealised, or paper, losses on investments rocketed to £77m.

It said many of the companies it backed are operating in a “challenging economic environment”, contributing to the unrealised loss, up from £9.8m in 2024, as assets were revalued.

At an operating level, income increased by 78.8% to £34.5m and for the second year exceeded its operating costs (£16.2m), while its portfolio grew to 42 businesses and projects.

So, excluding the unrealised losses, the Bank made a profit of £18.3m compared with £3.2m profit the year before.

Over the period it committed £145m and “crowded in” a further £324m. Since it was launched in November 2020, the Bank has committed more than £785m and crowded in a further £1.4bn.

However, the surge in unrealised losses will focus attention on the state-owned bank’s investment strategy and pay policy.

Over the period, outgoing chief executive Al Denholm received bonuses and pension payments of more than £100,000 taking his total remuneration package to £343,800.

Chief financial officer Michael Robertson received £63,474 in add-ons, taking his total remuneration to £239,612.

In May 2025, Audit Scotland published a performance audit of the Bank and concluded it has been well run to date, has a rigorous investment process, and has made a good start on realising the economic and societal ambitions it was established to deliver.

This financial year also saw the Bank’s subsidiary, Scottish Investments Ltd. (SIL), secure phase one authorisation from the Financial Conduct Authority (FCA). This set of permissions enables SIL to arrange investment deals, which supports the Bank’s objective to crowd in more private investment and delivers on its third-party capital strategy.

Willie Watt, the Bank’s chairman, said: “This year marked our fourth full year of operations, and we have made continued progress in developing the Bank’s capabilities and investment portfolio against a challenging economic context.

“We have expanded our portfolio and are investing in exciting companies with ambitious growth potential.

“Ongoing market volatility has followed years of geopolitical and economic uncertainty, creating a challenging environment for growing businesses and investment. In these difficult economic times, the role of a development bank is even more important.

“Our capital is playing an important part in helping companies scale when the wider market instability and continued cost of living pressures are hindering growth plans.

“We have a long-term goal of developing a vibrant, self-reinforcing and high-investment ecosystem in Scotland that makes a lasting contribution to our economic prosperity. We will navigate conducive and challenging economic climates with a focus on delivering long-term societal and economic impact.”

Mr Denholm, who announced in April he would be leaving, just two years after taking up the job, said: “Despite challenging economic headwinds and a cautious investment landscape, we crowded in £324m of additional capital alongside our investments this year, well above our target of £181m.

“This has helped scale existing investees with high-growth potential, like property technology company Utopi and digital forensics company Cyacomb.

“We have also grown our portfolio with exciting new investments in companies like plastic-free bottling company Pulpex, subsea cable manufacturer XLCC, and construction firm DITT’s mid-market rental homes in Shetland.”

The Bank’s commitment (£145.1m) and deployment figures (£157.5m) for the year were both below its targets, but this year also marks the first time the Scottish Government has awarded greater flexibility to the institution’s annual investment budget.

Mr Denholm said: “Investment opportunities don’t come to us in a linear way, and we would never compromise our robust due diligence process to rush a deal through before the end of a financial year.

“The challenge we have in making investment decisions within the constraints of a yearly budget cycle was an issue highlighted in Audit Scotland’s report on the Bank.

“We are, therefore, very pleased the Scottish Government has introduced greater flexibility, enabling us to carry over some investment budget allocation. Looking forward, we have a healthy pipeline of investment opportunities.

“As a young development bank and an investor in higher risk, early-stage companies, it is not uncommon or unexpected to see significant variations in the estimated fair value of our portfolio.

“We hold our investments over a longer term and would expect to see our valuation change and level off as our portfolio matures.

“Critically, as an institution we are hitting significant milestones, like our phase one FCA authorisation. We are attracting investor talent and leveraging our public sector funding to crowd in significant private sector capital.”