State-backed British Business Bank has swung back into the black with a £144 million pre-tax profit for the financial year 2024/25, rebounding from consecutive losses in the two previous years. The reversal was largely driven by revaluations across its venture capital and private equity portfolio, which saw a 19% uplift to £4.7 billion.
Over the year, the bank facilitated £6.8 billion in finance for smaller businesses — comprising £1.2 billion in direct equity and debt investments, £2.6 billion in guarantees, and £3 billion in privately sourced capital. The support package is forecast to generate 38,000 new jobs and £8 billion in UK economic output, with 84% of beneficiaries located outside London.
Chief executive Louis Taylor said, “We’re ready to manage third‑party capital — public balance‑sheet alone can’t close the growth gap.” He confirmed that the bank would pilot pooled pension and insurance fund investments under a new British Growth Partnership, set to launch in 2026.
The turnaround coincided with the Treasury’s Spending Review decision to increase the bank’s capital capacity by £6.6 billion to £25.6 billion. That expansion is designed to support scale-up firms and regional development initiatives under the government’s so-called “Leeds reforms” — a series of policy moves to decentralise financial services and boost long-term investment in the UK economy.
Regionally, the bank reported strong delivery in the North West (£700 million across 3,500 firms) and the East Midlands (£200 million supporting 1,700 firms and 1,200 jobs). Nationwide, 24,000 firms received first-time support in 2024/25, with a further 14,000 receiving follow-on funding.
Among its flagship schemes, the Start Up Loans programme issued 11,000 loans at an average value of £12,000, while its ENABLE Guarantees platform exceeded targets with £2.1 billion in commitments. Its rebranded Growth Guarantee Scheme also received a £500 million top-up in May amid trade uncertainty.
The broader market backdrop remains mixed. The Bank of England’s latest Credit Conditions Survey indicates SME credit availability has improved for the first time in six quarters, with challenger banks now responsible for around 60% of all new SME lending. However, persistent base rates of 4.25% and stagnant GDP growth continue to weigh on the outlook.
Analysts have highlighted the importance of the bank’s guarantee mechanisms in maintaining credit flow. “Guarantees remain essential; without them SME defaults would bite harder in the next credit cycle,” noted the Bank of England’s latest Financial Stability Report.
Still, the bank faces risks. Prolonged high rates, geopolitical trade tensions, or any renewed slump in tech valuations could dent future returns — and invite renewed political scrutiny over state involvement in high-risk venture markets.
