British Business Bank supports more than £12.4bn of finance through its core programmes and meets its objectives, but reports a loss for 2022/23 due to falls in market valuations
Louis Taylor, CEO, British Business Bank, 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.”
Performance against 2022/23 Key Performance Indicators
The Bank’s performance against its measured objectives in the last financial year was as follows:
- Increasing the supply of finance to smaller businesses – The stock of finance supported through the Bank’s core finance programmes was £12.4bn at the end of March 2023, supporting more than 90,000 businesses, significantly exceeding its £10.7bn target.
- Helping create a more diverse finance market for smaller businesses – The Bank continued to deploy the vast majority of finance in its core finance schemes outside of the largest UK banks, exceeding the target set. 99% of the Bank’s finance was provided outside the ‘Big Five’ banks, against a 97% target.
- Identifying and helping to reduce regional imbalances in access to finance – The Bank met its target for deployment of finance across the UK’s Nations and regions, deploying £1.27bn of finance outside of London.
- Being the centre of expertise on smaller business finance in the UK, providing advice and support to the Government – The Bank was assessed to have met its objective in deploying its expertise to the government effectively informed by delivery against six performance indicators.
- Achieving its other objectives while managing taxpayers’ money efficiently – The Bank achieved an adjusted return of 6.5%, significantly exceeding its target of 1.3%.
- Supporting the UK’s transition to a net zero economy – the Bank met its key milestones in delivery of an initial portfolio alignment strategy, an emissions baseline for its own operations, and an initial delivery plan to target net zero in its own operations.
Core programme highlights
- Our existing regional funds – the Northern Powerhouse, Midlands Engine and Cornwall & Isles of Scilly Investment Funds – invested an additional £152m. 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.
- Our ENABLE Guarantee and ENABLE Build programmes committed a record total of £868m during the 2022/23.
- Our Regional Angels programme made £55m of new commitments, helping to reduce regional imbalances in access to seed and early-stage equity finance for smaller businesses across the UK.
- Our Start Up Loans programme passed the 100,000 loans milestone, and continues to unlock the potential of entrepreneurs by tackling barriers to finance faced by small business owners because of their ethnicity, gender or employment status.
Lord Smith of Kelvin, Chair of the British Business Bank, 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.”
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About the British Business Bank
The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
As well as increasing the supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of finance options available to smaller businesses. The British Business Bank Finance Hub provides independent and impartial information to businesses about finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success.
The British Business Bank is also responsible for administering the government’s three Coronavirus loan schemes and its Future Fund, together responsible for delivering £80.4 billion in finance to 1.67 million businesses. These schemes are now closed to new applications.
British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. Wholly owned by HM government, the Bank and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at the British Business Bank.
This statement and the transaction described above does not constitute or imply any endorsement, warranty or recommendation by the UK Government, the British Business Bank plc, its subsidiaries or any other party of ThinCats, Citi or Barclays Bank, or their respective products or services.
The ENABLE Guarantee programme is managed by British Business Financial Services Ltd, a wholly owned subsidiary of British Business Bank plc, on behalf of, and with the financial backing of, the Secretary of State for Business and Trade.