Housebuilding boost on cards as taxpayer-backed Scottish National Investment Bank unveils new strategy

The updated blueprint is being spearheaded by new chief executive David Ritchie and focuses on the bank’s commercial investment remit and long-term financial stability.

SNIB was set up in 2020 to invest in companies and projects with potential to deliver both “financial returns and societal benefits”. It is wholly owned by Scottish government ministers, on behalf of Scottish taxpayers, but operates independently from government.

Last August, the bank flagged a “healthy pipeline” of opportunities as its annual accounts revealed a paper loss of £77 million amid a tough economic backdrop.

The new strategy will see SNIB expand its “innovation mission”, which previously targeted technology and life science innovation, to be “sector agnostic”.

Meanwhile, the bank’s “place mission” will focus on expanding its “all-tenure approach to increasing the supply of homes for communities around Scotland”. To date, its investments have supported the delivery of nearly 1,000 new homes.

The new strategy is based on “developing strong partnerships to unlock stalled sites” and supporting the nation’s small-to-medium-sized housebuilders.

The bank said it would also be looking at increasing the depth of the housing supply chain and crowding in more capital to support Scottish development, as it has done with fund investments in Octopus Capital and L&G, both of which included crowding-in ratios. It means that for every pound the bank invests, a further pound or more will be invested in Scotland by the funds.

Aligned to its “net zero mission”, SNIB is looking at fresh opportunities in “energy security and stabilisation”. It also intends to design a fund to support innovative businesses emerging from Scottish universities in the coming year. This would build upon the £100m the bank has already invested in university derived businesses.

Ritchie said: “The bank is entering its next phase of maturity. This is an opportunity for us to learn from our first five years and sharpen our focus on the commercial returns that will ultimately deliver long-term societal impact.

“While our risk appetite remains unchanged, our new strategy ensures we also stay grounded in our commercial fundamentals. Our vision is to become a perpetual fund that delivers impact and generates returns that can be reinvested, harnessing the potential of emerging opportunities for future generations.”

SNIB celebrated its five-year anniversary last November and has committed more than £1.2 billion in capital, with £1.9bn invested alongside. The bank has also experienced some portfolio failures, which it said were an expected part of investment, particularly for a development bank that is mandated to take on higher risk.

Ritchie - appointed chief executive in January - added: “Whether you’re a business trying to secure investment or a family trying to balance a budget, we are all feeling the impacts of our challenging macroeconomic climate.

“Volatility is now the defining feature of the market. While we have seen these issues impact Scottish businesses, there are also clear opportunities, and our strategic direction is calibrated to capitalise on this potential, channel more investment into Scotland, and support the development of a thriving economy.”