BRITISH Business Investments – the commercial arm of the British Business Bank – reported a 4.4 per cent rise in pre-tax profit to £71m in its fifth year of operation.
This was a smaller increase than the previous year, when pre-tax profits jumped 23 per cent to £67.9m.
The state-backed lender – which invests through alternative finance providers including peer-to-peer lending platforms – aims to increase the supply of finance available for small- and medium-sized enterprises (SMEs), while generating an attractive return on investment for the UK taxpayer.
Its annual report said it had made seven new commitments totalling almost £200m in the year to 31 March 2019, including agreements with four new partners, bringing its total number of portfolio investments to 46.
By the end of the period, it was supporting £11.4bn of finance through its programmes in the UK market – a year-on-year increase of 9.4 per cent – invested in 34,070 businesses.
At the same time, it delivered a 6.5 per cent gross return on capital invested, or 5.6 per cent net of costs, ahead of benchmarks of 5.6 per cent and five per cent respectively.
“We are pleased to report a strong set of results for the 2018/2019 financial year, with a solid return on investment for our shareholder, the British Business Bank,” said Catherine Lewis La Torre, chief executive of British Business Investments.
“In the 2018/19 financial year, we exceeded all of the objectives our shareholder set, and I look forward to continuing that success as we further develop the business.”
As well as P2P lenders, it also invests through small-cap private debt funds, challenger banks, asset finance providers, equity funds-of-funds and regionally-based early stage investors to boost SME finance.