Despite the loss, the taxpayer-owned bank highlighted its operational profitability and a “healthy pipeline” of future opportunities.

For the second consecutive year, the bank’s income of £34.5 million outstripped its operating costs of £16.2 million. The income figure marks a 78.8 per cent increase year-on-year, while the bank’s portfolio has grown to include 42 businesses and projects.

Established in November 2020 with a £2 billion, ten-year commitment from the Scottish Government, SNIB is tasked with investing in companies that deliver both financial returns and societal benefits. Its key missions are supporting the transition to net zero, tackling place-based inequality, and scaling up innovation.

Chairman Willie Watt acknowledged the tough economic backdrop but noted the bank had made “continued progress” in developing its capabilities. He stressed that as a development bank, SNIB’s role is to provide long-term growth capital where commercial lenders may not, often by taking on greater risk. “We take any individual losses seriously but recognise that an appropriately high level of investment risk is essential to our role in Scotland’s investment landscape,” he stated.

In the 2024-25 financial year, the bank committed £145.1 million to new ventures and leveraged this to “crowd in” an additional £324 million in private investment. Since its inception, SNIB has committed over £785 million, attracting a further £1.4 billion from other investors.

However, both the commitment and deployment figures for the year fell below internal targets. Outgoing chief executive Al Denholm explained this was a result of a robust due diligence process. “We would never compromise our robust due diligence process to rush a deal through,” he said, adding that several potential investments towards the end of the financial year did not meet the bank’s requirements.

Addressing the challenge of working within a yearly budget cycle, Mr Denholm welcomed the Scottish Government’s decision to grant the bank greater flexibility to carry over its investment allocation into the next year. “We hold our investments over a longer term and would expect to see our valuation change and level off as our portfolio matures,” he added.

Further bolstering its capabilities, the bank’s subsidiary, Scottish Investments Ltd (SIL), secured phase one authorisation from the Financial Conduct Authority (FCA), enabling it to arrange investment deals and help attract more private capital into Scotland.

While the statutory loss before tax of £58.4 million may attract scrutiny, the bank’s leadership maintains that its long-term mission to support innovative Scottish companies through their critical early stages is on track.