The Scottish National Investment Bank disclosed a net loss of £138m for the 2025-26 financial year, driven primarily by the collapse of three early-stage investments and subsequent write-downs on two firms that entered administration.
The state-owned development bank attributed £65m of its realised losses to the failure of three ventures: Glasgow-based laser manufacturer M Squared Lasers, electric vehicle charging company Trojan Energy, and satellite and digital services firm Krucial. An additional £85m in unrealised losses stemmed from rocket manufacturer Orbex and medical technology company Pneumowave entering administration.
Despite the substantial losses, the bank generated £32m in income, which exceeded its operating costs of £20m. Chief executive David Ritchie characterised the results as "regrettable and disappointing" but defended the bank's investment strategy, stating he remained committed to proving that "a commercially disciplined development bank can deliver for Scotland".
Why did the bank make such large losses?
The losses reflect the inherent risks of venture capital investment, particularly during a challenging macroeconomic period. Ritchie acknowledged that some level of loss aligns with the bank's mandate to accept risk in pursuit of economic impact. He emphasised the importance of transparency about the risks undertaken and the safeguards applied when deploying public capital.
According to the bank's five-year review, losses had reached £73m by the end of 2025-26, with up to £37m more expected from the two investees in administration or liquidation. The review, authored by Sir John Elvidge, a former chief civil servant to the Scottish government, found that the bank was expected to have made losses of approximately £110m by the end of the financial year, suggesting the actual outcome was broadly in line with projections.
What is the bank's track record overall?
Since its establishment in 2020, the Scottish National Investment Bank has deployed more than £1.2bn across 53 ventures and facilitated £1.9bn in third-party investment. In the 2025-26 financial year alone, the bank invested a record £374m in Scottish businesses, while keeping operating costs below budget.
According to the bank's impact report for 2026, its investment portfolio directly supported 2,631 jobs in 2025, with a further 699 jobs created through indirect and induced economic effects. Income also strengthened significantly, rising nearly 80% to £34.5m according to the bank's 2025 annual report, more than double its operating costs of £16.2m.
What did the independent review conclude?
Sir John Elvidge's independent assessment found that the scale of failed investments was not necessarily higher than should be expected for a newly launched development bank operating in volatile market conditions. He stressed the importance of the bank learning from the losses but did not characterise the results as evidence of poor investment decisions or governance failures.
The Scottish Government's response to the review noted that the bank had deployed over half of the £2bn in capital funding committed through 2030, positioning it to continue its mission of supporting Scottish economic growth and innovation.
An element of loss, however, is consistent with the mandate we hold, the risk we accept in pursuit of impact, and the macroeconomic conditions in which we are operating. These results underline the importance of being explicit about the level of risk we take, why we take it, and the safeguards we apply when deploying public capital.
What happens next?
The bank was scheduled to publish its full annual report and accounts in August 2026, incorporating updated loss figures from the five-year review. This disclosure will provide further detail on the bank's financial position and investment performance as it enters its next phase of operations.
Key Facts
- The bank reported a net loss of £138m for 2025-26, comprising £65m in realised losses from three failed investments and £85m in unrealised losses from two firms in administration
- Despite losses, the bank generated £32m in income, comfortably exceeding operating costs of £20m
- Since 2020, the bank has invested over £1.2bn across 53 ventures and helped raise £1.9bn in third-party funding
- The bank's portfolio directly supported 2,631 jobs in 2025, with additional indirect economic benefits
- An independent review found the loss levels broadly consistent with expectations for a newly established development bank operating in challenging market conditions
