The government-owned British Business Bank (BBB) has swung to a pre-tax deficit of almost £147 million annually.

The lender for economic development claims that broader economic issues caused a decline in the value of the companies it has invested in.

The bank claims that, “despite the difficult economic environment,” finance agreements of £1.6 billion were made in the year.

BBB was established in 2014 to invest in and lend money to smaller UK businesses to assist with their establishment and growth.

The bank said that in the 12 months ending in March, the value of its investments decreased by £146 million, or 5%. This contrasts with a profit of £619m the year before.

The values of technology companies have declined globally in recent months as investors have grown more cautious as a result of rising borrowing rates and sluggish economic growth.

“Given the longer-term 10-year horizon for most of our investments we would expect an overall upward trajectory despite these in-year fluctuations,” the bank’s chief executive Louis Taylor said.

According to BBB, it has already funded more than 90,000 firms to the tune of £12.4 billion, exceeding its $10.7 billion goal.

The amount does not include the loans it administered for Coronavirus.

The three Covid-19 loan programmes and the government’s Future Fund, which together have provided more than £80 billion in financing to nearly 1.7 million firms, are administered by the BBB. New applications are no longer accepted for the schemes.

After investing public funds in organisations like the sex party promoter Killing Kittens and the football team Bolton Wanderers, The Future Fund gained notoriety.

More than half of the £1 billion in loans made through the bank’s Start Up Loans programme went to minority- and women-owned small enterprises.

The programme intends to assist underrepresented groups who are turned down by traditional lenders to start enterprises, as well as areas outside of London and the south-east of England.

The majority of the finance is provided by lenders other than the ‘big five’ banks in the UK.

(Adapted from TheIndependent.co.uk)

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