Scottish National Investment Bank

10th July 2019

The Economy, Energy and Fair Work Committee of the Scottish Government has published its report on creating a Scottish National Investment Bank.

What is it?

Why do we need one?

How will it work?

In simplest terms, a national investment bank is an institution created by a government to finance economic development. Such bodies have become popular again in Europe post-2007-08. The British Business Bank (BBB) and Banking Corporation of Ireland, for example, were set up in 2014, the Development Bank of Wales (DBW) in 2017.

Par Equity's Andrew Castell told the Committee—

Essentially, SNIB is an example of that great Scottish invention, the investment trust - it is not really a bank.

The key issues for SNIB, identified by the Advisory Group, were—

• A need for greater long-term investment (or patient capital) in small to medium size enterprises (SMEs)

• Scotland's relative innovative performance lagging behind comparator countries

Furthermore, the Bank will have a national mandate while also being expected to maintain regional reach in order to help businesses across Scotland to achieve their economic potential; something considered particularly important since Scotland's productivity varies significantly across regions.

The Bank will act commercially (see paragraph 62 for elaboration of acting commercially), meaning it should target a positive financial return at both an individual investment and portfolio levels - the portfolio return target set over the long-term. The financial target rate of return will be finalised prior to vesting of the company.

Read the full report HERE

To listen to a Common Weal podcast discussing the SNIB go to -

https://www.commonspace.scot/articles/14469/common-weal-policy-podcast-episode-15