Sheffield-based British Business Bank, the UK’s economic development bank, said it committed a record £2.3 billion in smaller business finance to the market in 2023-24 — but it reported a “largely unrealised” loss of £122 million for the year due to short-term fall in valuations.
The Sheffield bank said it made £777 million of debt commitments during the year, versus a target of £713 million, and made £1.527 billion of equity commitments versus a target of £1.331 billion.
The bank reported £1.782 billion of “gross deployment” outside of London versus a target of £1.080 billion.
British Business Bank CEO Louis Taylor said: “In the last year, the British Business Bank has performed above expectations against a backdrop of challenging market conditions, making funded commitments of £2.3bn across our programmes.
“The impact of the activities we carried out in 2023 is expected to be the creation of 39,400 additional jobs and £8.4bn of gross value added (GVA) over the life of the finance.
“As suggested last year, the continuing challenging market for investments has resulted in a loss of £122m for 2023/24.
“However, this is largely an unrealised loss, reflecting short-term falls in the book valuation of long-term investments, rather than actual cash losses.
“Significantly, valuations remain 1.35 times our original cost, and we would expect them to rise further over their five-to-10-year investment period as we enter a period of recovery and economic growth.”
For the first time, the British Business Bank published an Impact Report which sits alongside its Annual Report and Accounts.
In calendar year 2023, the bank said it deployed a total of £6 billion of finance into smaller businesses — £3.5 billion of public funding with an additional £2.5 billion of private capital leveraged alongside.
The bank said this enabled it to fund 23,100 smaller businesses, 84% of which were outside of London, provide total funding of £2.9 billion to the nations and regions outside of London, and support equity deals accounting for 18% of all 2023 UK smaller business equity investment.
It said the expected impacts over the life of this finance are the creation of 39,400 additional jobs and £19.8 billion of additional business turnover, equivalent to an extra £8.4 billion of Gross Value Added (GVA).