The Development Bank of Wales delivered record debt and equity investment of £152m in its last financial year to support SMEs to expand and create new jobs.
The bank, which is wholly-owned by the Welsh Government and was created in 2017 succeeding what was Finance Wales, said its increased investment activity helped 502 businesses to create and safeguard 6,185 jobs across Wales - of which 82% were classed as microbusiness and employing less than ten. Some £87.9m was provided to micro-businesses.
Not including property funds it manages for the Welsh Government, it provided loans of £84.1m and made equity investments of £18.7m during the financial year to the end of March, 2025. Its average interest on loans was 8.2%, with the lowest at 3.25% - where it was able to deploy discounts for green loans - up to 14.7%.
Its investments over the year, both debt and equity, secured co-investment of £64.4m, compared to £50.1m a year earlier. The bank has set a target of co-invest of 1:1, but in the year only managed a level of 1:0.42. However, it insisted it remains on track over a five year period to achieve the target of every £1 it invests generating the same amount in co-investment.
Of the £64.4m co-investment, £10.7m was equity and £53.8m debt.
The latest year end figures bring the total amount invested into SMEs and property developers by the Development Bank since its launch to £958m. It has £2bn in funds under management - which includes managing funds outside of Wales - and a portfolio of more than 3,600 SME customers.
During the year there was a 26% increase in funding for the property sector to £48m. It also successfully executed five equity exits totalling £7.4m. Citing reasons of commercial sensitivity it was not able to say what the overall rate of return was on the original equity investments.
However, it said a £1.2m equity investment into Wrexham-based life sciences Aparito secured a 2.9 times return when it was acquired by global pharmaceutical company Eli Lilly and Company.
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Some 28 businesses secured £7.9m from the British Business Bank’s £130m Investment Fund for Wales, for which the large debt element is managed by development back subsidiary FW Capital. The debt deals leveraged £1.1m in private sector co-investment and created or safeguarding 577 jobs.
Rebecca Evans, Cabinet Secretary for Economy, Energy and Planning said: “The development bank is a unique resource for Wales – promoting innovation, increasing prosperity, and supporting the transition to a sustainable economy.
“These impressive results show that the development Bank is delivering for the economy of Wales by making it easier for businesses to get the finance needed to start up, strengthen and grow.”
Chair of the bank Sally Bridgeland, who took up the role last September succeeding Gareth Bullock, said: “Boosting growth and unlocking investment by increasing the supply of debt and equity finance for SMEs is what underpins the long-term sustainability of any economy.
“The development bank is an organisation delivering long-lasting, positive change. Together, we’re proud of what has been achieved in the last year and all that we’re doing to support the aspirations of the Welsh Government and the people of Wales, creating opportunity, providing value for money for public funds and collaborating with others to increase investment in Wales.”
Giles Thorley, chief executive of the development bank., said:“2024/25 has been a positive year with more funding for more businesses than ever before. Indeed, we’ve seen strong demand for both debt and equity funding throughout Wales and the Investment Fund for Wales has performed particularly well, helping to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses. We are grateful for the continued support of the Welsh Government and the British Business Bank to make this level of investment possible.
“With teams based on the ground in communities throughout Wales, we’re working across a broad range of sectors including those that offer the highest growth opportunities. From tourism and hospitality to life-sciences and defence, it’s all about making sure that businesses based in Wales or relocating here can access the funding that they need to start-up, scale-up, adopt new technologies and create employment opportunities.”
A detailed analysis of the financial statements for the Development Bank of Wales will be published in its 2024/25 annual report later this year.