The Scottish National Investment Bank (SNIB) has made a profit of £ 828,000 since it opened 12 months ago.
The government-funded but operationally independent development bank holds 81% of its money in investments “where no market price is available.”
The accounts for the period October 13, 2020 to March 31, 2021 showed that the growth profit for the period was £ 3.8million, with total equity from investments amounting to £ 31.3million. pound sterling.
SNIB has committed £ 52.5million of investment on two initial investments, Glasgow-based laser company M Squared, which received £ 12.5million, and Places for People Capital, which received 4 million pounds sterling. These have so far generated £ 400,000 in the form of principal interest and fee income.
In total, SNIB made eight investments worth £ 160million during the period, including Nova Innovation, Forev, R3 IoT and the Gresham House Forestry Fund.
Total operating costs of £ 2.9million were incurred, mainly comprised of staff costs and associated recruiting costs to bring the team up to 30.
The cost to paying employees and their recruitment was £ 1.1million. Chief Executive Officer Eilidh MacTaggart revealed that the bank plans to hire more staff, increasing its number from 30 to 45.
Mactaggart earns a base salary of £ 235,000 and has so far received around £ 132,820. CFO Sarah Roughead receives a base salary of £ 160,000.
Willie Watt, chairman of the bank’s board, can be awarded up to £ 60,000 per year for 48 days of work, but so far he has only been paid £ 20,000 for 16 days of work .
The Scottish government has pledged to finance the bank with £ 2 billion over 10 years.
At an event earlier this week, Watt commented: “We are humbled by this commitment, but it is insufficient to fulfill the missions given to us, so we must raise third-party capital,” adding that his team was looking for Authorization from the Financial Conduct Authority to borrow from its own balance sheet and to raise capital on the private markets.
He also explained that so far the bank’s investments have been geared towards start-up and scale-up, with almost everything having a low-carbon element.
While six of the eight investments have been direct, funds have a role where skill and scale is not something the bank has in-house.
The annual report also noted that ‘the shares of the bank are issued to Scottish ministers on behalf of the Scottish people in return for the value of the capital funding received for the investment’.
SNIB plans to use public funds to expand its investment team and develop its investment portfolio.
The accounts also revealed that in the first year SNIB issued £ 22.9million of shares for the value of the investment drawn during the period. “This, combined with the £ 50,000 share capital issued upon incorporation, includes all of the bank’s share capital on March 31, 2021.”
Mactaggart wrote in the report: “The bank will seek to actively contribute to the development of Scottish Government policy to support the delivery of missions through positive and collaborative relationships and information with key partners in the political landscape, including including non-governmental organizations, policy makers and regulators.
“Over time, the bank will be able to provide investment market data and analysis to support future policy development.
“During the next financial year, the bank will consult, develop and publish its strategy on equality and diversity.
A SNIB spokesperson added: “The bank was established to be a long-term institution which will be active in the Scottish economy for decades to come.
“Great progress has been made despite the significant challenges the pandemic has posed for everyone.
“Since its launch, the bank has accepted £ 120.9million in mission-driven investments and continues to develop a strong portfolio of opportunities. “
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