Receive free Scotland updates
we will send you myFT Daily Digest Email summary of latest news Scotland There is news every morning.
Losses nearly doubled in the last financial year as the company set up by Scotland’s National Investment Bank to manage the government’s flagship recycling scheme collapsed.
The Edinburgh-based bank, which aims to invest in sustainable businesses, posted a pre-tax loss of £20.2m in the year to March, compared with £11.2m a year earlier, after suffering a £17.8m ” Unrealized losses” were largely the result of Scotland’s revolving bank falling into administration, according to the bank’s annual report published on Wednesday.
The bank, established in 2020 with a mandate to fund projects that reduce carbon emissions, reduce inequality and promote innovation, has invested £9 million in the Scottish Revolving Fund.
The company was set up to administer the Government’s Deposit Recovery Scheme (DRS) and is funded by the drinks industry. It collapsed in June.
By the end of March, the bank had written down the value of Circularity Scotland’s investment by £4.5m, recognizing the risk that the scheme could be delayed.
The scheme has been delayed until at least October 2025 after the UK government refused to give full approval to the scheme.
Scotland’s attempt to implement DRS before the rest of the UK triggered a constitutional battle with London, which claimed Edinburgh’s plans were inconsistent with proposals for plans elsewhere.
The extension is a major blow to Scotland’s First Minister Humza Yousaf’s ambitions to achieve a net zero economy by 2045.
UK ministers agreed to approve the scheme provided the glass industry was excluded from its scope. They said this would ensure Edinburgh’s plans were compatible with those in the rest of the UK.
However, Scotland refused to change the policy and accused London of sabotaging the plan.
SNIB’s losses on the deposit return scheme are likely to be seized upon by its critics, who say the bank’s government mandate could lead it to make unwise investment decisions.
Ross Brown, professor of entrepreneurship at the University of St Andrews, said: “This is exactly the kind of politically motivated investment that many, including myself, predicted would be undermined by the political pressure to support the Scottish Government’s move. . ”
But Al Denholm, the bank’s chief executive since April, said he believed there was no political interference in the bank’s decisions.
“If you look back at our track record, as I did when I joined, it’s clear that this has been a very robust, independently led investment decision,” said Denholm, who previously worked at Aviva Investment Solutions and Blackjack He holds senior positions in investment companies such as Germany. .
“We are very disappointed with the results . . . but we are sticking to our investment process,” he added.
SNIB deployed £151.9m in the year to March, up from £129.3m the previous year and below the £200m it needs to allocate annually to meet its target of lending £2bn to businesses over ten years.
“It will take them a long time to catch up,” said Stephen Hunsaker, a researcher at the British think tank Transform Europe.
Svlook
