The British Business Bank has recorded a £135m loss in the year ending March after a drop in portfolio valuations.

The state-owned economic development bank, which backs venture capital funds and businesses particularly in the tech and life sciences sectors, saw its portfolio’s valuation drop 5 per cent and expects pressure to remain over the next 12 to 18 months.

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

Taylor took over from Catherine Lewis La Torre in February this year, stating at the time he’d like to see the bank invest in more UK scale-ups.

The BBB did exceed expectations in some areas: it supported 90,000 businesses with £12.4bn through its core finance programmes – which includes the start-up loans programme and Future Fund – and deployed £1.27bn to businesses outside London.

 “The British Business Bank has continued to build momentum in 2022/23, making a total of £1.6bn of commitments despite the challenging economic environment,” Taylor said.

“After the pandemic, we have re-focused on the UK’s future economic growth as we deliver against our new strategic objectives from 2023/24. These are: driving sustainable growth, backing innovation, unlocking potential, and building the modern, green economy.”

Lord Smith of Kelvin, chair of the bank, added: “There can be no doubt that the prevailing market conditions during 2022/23 have been both demanding and extraordinary. Our role is especially important at the more difficult points of the economic cycle and this is why we have continued to invest during the last year.”

More on the British Business Bank

What is the British Business Bank? – a Growth Business guide – The British Business Bank is the UK’s economic development bank supporting nearly 8m businesses through £6bn of finance. Growth Business takes you through all the funding initiatives on offer