Scottish State Bank Reports £138mn Loss

Scotland’s state-backed development bank has reported a £138 million net loss, bringing fresh scrutiny to how public capital is used when governments try to fill gaps left by private investors. The Scottish National Investment Bank, launched in 2020, has now recorded five consecutive full-year losses.

The latest result was driven by portfolio writedowns and the failure of five companies it had backed. Realised losses of £65 million were linked to collapsed investments including space-tech start-up Krucial, laser manufacturer M Squared and EV infrastructure firm Trojan. Further unrealised losses of £85 million came from writowns, including anticipated losses tied to medical technology developer PneumoWave and rocket company Orbex.

The bank’s mandate makes the figures more complex than a simple profit-and-loss story. SNIB was designed as a patient, impact-focused investor, backing areas such as net zero, innovation and economic growth across Scotland. That requires taking risks commercial lenders may avoid, while still limiting taxpayer exposure.

The Scottish government has committed to capitalise the bank with £2 billion over its first decade. In 2025-26, SNIB committed £374 million to Scottish businesses and projects, its largest annual allocation so far, alongside £445 million of outside investment. Since launch, it has committed £1.2 billion and attracted a further £1.9 billion in private capital.

SNIB has tightened investment conditions since 2023, with greater emphasis on stronger commercial terms, later-stage technologies and deeper co-investor support. The next test is whether the bank can show that today’s losses are not just the cost of failed bets, but part of a credible route to long-term economic value.