The Leeds-based UK Infrastructure Bank has achieved an after tax profit of £104m in its first year of operation, its new annual report has shown.
The UK Infrastructure Bank opened in June 2021, with the aim of helping to tackle climate change, and boosting growth across the United Kingdom.The Bank is wholly owned by HM Treasury but is operationally independent from the government.
As last week, the bank has announced announced 10 deals worth £1 billion.
John Flint, CEO of the UK Infrastructure Bank said: “I’m pleased the bank is making good progress, as we continue to scale up and build our capabilities to move into our next phase of development.
“Now in our second year, we are building on strong foundations and see plenty of opportunity to deliver real impact against the urgent mission set by our shareholder.
“I am confident that with the right people on board, we can have a long-term, positive impact on the future of infrastructure across the UK.”
The Bank’s latest Annual Report and Accounts show results for the period to 31 March 2022.
In its first year, the bank closed five deals across a range of sectors including digital, clean energy and transport.
The bank’s headcount also increased to over 130, with recruitment expected to continue. 90 per cent of new staff are expected to be based outside of London, with the majority based at the bank’s Leeds headquarters.
UKIB notes that its profit this year was largely driven by the sale of a legacy asset from within one of its funds relating to electric vehicle charging facilities.
When the bank was created in 2021 it was seeded with two third-party managed funds, established by the government’s Infrastructure and Projects Authority; the Digital Infrastructure Investment Fund, and the Charging Infrastructure Investment Fund.
In early 2022, an underlying investment in the Charging Infrastructure Investment Fund was sold at a substantial gain.
Annie Ropar, chief financial officer, said: “The Annual Report and Accounts show that the bank made a profit after tax of over £100 million in its first year, representing a 30 per cent return on equity.
“It is of course unusual for a new start up bank to make a profit in its first year. This shows the benefit of making equity investments in a variety of ways, including through third-party fund managers.
“As the Bank transitions into its next phase of development, we continue to build on what we have achieved in the first year. We cannot underestimate the size of the challenge ahead in reaching net zero and reducing regional inequality in the UK, but I am confident we can have real impact, and we look forward to playing a key part in helping to put in place the necessary infrastructure to see these ambitions become a reality.”
Chris Grigg, Chair of the UK Infrastructure Bank, said: “The Bank has achieved a great deal in its first year, though we know there’s more to do.
“In the coming year I look forward to the Bank growing further, being put on a statutory footing, continuing to forge strong links with a wide range of stakeholders and seeing the Bank mature into an enduring institution.”
