Scottish National Investment Bank makes 'painful' £138m net loss
Source: BBC Politics ↗
The publicly-owned body, which operates independently, has invested in several firms that collapsed last year. The state-owned body cited the collapse of three of its early investments - including its first, Glasgow-based laser company M Squared. However, the bank also generated an income of £32m, comfortably covering its operating costs of £20m. Chairman Willie Watt called the losses "painful" but said the bank had learned lessons. The Scottish National Investment Bank, which is independent from government, was set up by ministers in 2020 with a mission to fund business and innovation to boost economic growth. Its report for the 2025-26 financial year , external revealed a net loss of £138m, including £65m of realised losses from the failure of three early investments - M Squared Lasers, the electric car charging firm Trojan Energy and the satellite and digital company Krucial. There was a further £85m of unrealised losses after rocket manufacturer Orbex and medical technology firm Pneumowave entered administration.
The bank also invested a record £374m in Scottish ventures, while its operating costs were below budget. Watt said: "The realised and unrealised losses we have seen in this financial year reflect that and are not where we want to be. "While these figures are painful for the bank, they are particularly so for the businesses which failed and of course for their teams." He cited a tough economic environment with "tighter financial conditions, cautious sentiment and more challenging fundraising". Watt added: "We have learned a lot over the past five years and continue to improve and tighten our investment processes along with stricter criteria for potential investments as set out in our investment strategy." Chief executive David Ritchie called the losses "regrettable and disappointing", but said he was determined to demonstrate that a "commercially disciplined development bank can deliver for Scotland". M Squared Lasers - the Glasgow technology firm was hailed by Nicola Sturgeon as "a great example of the ambitious and innovative companies we have here in Scotland" when the national investment bank was launched in 2020. It went into administration in 2025 with debts of £64m Trojan Energy - the Aberdeen-based electric vehicle charging firm collapsed into administration with debt of almost £30m last year Krucial - the Glasgow-based start-up, which specialised in satellite technology, folded last year. Orbex - set up to run a planned satellite launch facility in the north-west Highlands, the company is to be liquidated and its assets sold off Pneumowave - headquartered in Glasgow, the medical tech firm appointed liquidators in July Since being set up in 2020, the bank has investment more than £1.2bn in 53 ventures and helped to raise £1.9bn in third-party investment.
An independent report by Sir John Elvidge , external , a former chief civil servant to the Scottish government, found that the bank was expected to have made losses of about £110m by the end of 2025-26 financial year. He said it was important that the bank learned lessons from the losses, but did not say the scale of the failed investments were necessarily higher than should be expected for a newly launched body. Responding to the bank's annual report, First Minister John Swinney said it must be able to take risks to deliver "greater economic returns". He said that principle was essential to "constructing an economy that is fit for the 21st Century". Scottish Labour economy spokesperson Daniel Johnson said: "These losses must be examined and the bank's leadership must continue to work to identify investment opportunities that will deliver for our economy and our communities." Kim Schmulian, Reform UK Scotland's finance spokesperson, said: "This is yet another example of SNP ministers gambling with taxpayers' money while those responsible try to dress up failure as a 'challenging environment'." Scottish Conservative finance spokesman Craig Hoy said that the bank "must not become another SNP vanity project where taxpayers are left to foot the bill for failure while ministers dodge responsibility".
⚡ Effects Interpreter
🌍World Economymedium impact
What this means for you
- ▶Allies and rivals alike will be reading this story closely.
- ▶A change in tone from government can move sentiment well beyond its borders.
🏙️Local Economylow impact
What this means for you
- ▶The cost of a weekly food shop can creep up in the background.
- ▶Jobs and trade close to home might feel a soft knock-on effect.
🏦Rates & Bankslow impact
What this means for you
- ▶Savers might see little change until the wider picture becomes clearer.
- ▶Central bankers tend to prize stability, so political noise rarely rushes them.
❤️Healthmedium impact
What this means for you
- ▶Health anxieties triggered by news like this usually ease once facts replace speculation.
- ▶Talking things through with family or friends can ease the load.
💷Wealthmedium impact
What this means for you
- ▶It's rarely wise to make big financial decisions purely on breaking news.
- ▶A brief dip in value is not the same as a permanent loss.
🏠Housingmedium impact
What this means for you
- ▶Housing supply and demand rarely turn on a single piece of news.
- ▶A slow-moving market like housing rarely reacts overnight.
🌍 Effects for your country
The U.S.'s central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The U.S.'s economy is growing at 2.3% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the U.S.'s own central bank rate closely. With the U.S.'s unemployment at 4.4%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the U.S. depends more on local healthcare capacity than the figures above.
The UK's central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The UK's economy is growing at 0.8% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UK's own central bank rate closely. With the UK's unemployment at 5.6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the UK depends more on local healthcare capacity than the figures above.
France's central bank rate currently stands at 2%, so a global rates move like this could feed through to local borrowing costs. France's economy is growing at 0.9% with inflation at 1.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track France's own central bank rate closely. With France's unemployment at 7.9%, personal-finance effects like this land on a labour market that is already under strain. Health-system effects are harder to localise from economic indicators alone — the real impact in France depends more on local healthcare capacity than the figures above.
Romania's central bank rate currently stands at 6.5%, so a global rates move like this could feed through to local borrowing costs. Romania's economy is growing at 0.7% with inflation at 7.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track Romania's own central bank rate closely. With Romania's unemployment at 6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in Romania depends more on local healthcare capacity than the figures above.
The UAE's central bank rate currently stands at 3.65%, so a global rates move like this could feed through to local borrowing costs. The UAE's economy is growing at 3.1% with inflation at 2.5%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UAE's own central bank rate closely. Health-system effects are harder to localise from economic indicators alone — the real impact in the UAE depends more on local healthcare capacity than the figures above.