Development bank has £156m injection impact

THE Development Bank of Wales had a £156m investment impact in its first year of operation.

Set up last October, the bank, which is wholly owned by the Welsh Government, directly invested – from debt to equity – £72m into 344 businesses.

This was a 24% increase on the last year of its predecessor, Finance Wales. This in turn attracted £84m in private investment from investors such as Wealth Club, HSBC Ventures and Wesley Clover.

With its HQ in Wrexham but the bulk of its workforce in Cardiff, it also established business angel network Angels Invest Wales and Economic Intelligence Wales, a research collaboration with Cardiff Business School and the Office for National Statistics.

Last month it completed the move of its headquarters to Wrexham Technology Park, adding 18 new members of staff to the north Wales team out of a total headcount increase of 30 across Wales.

Giles Thorley, chief executive of the Development Bank of Wales, said: “The first year of the Development Bank of Wales has demonstrated good progress, making Wales an attractive place for micro to medium businesses to raise the capital they need to get started, strengthen and grow.

“I am particularly proud that as an active equity and technology investor, we have helped Cardiff become an equity hotspot ranked at number 18 in the Small Business Equity Tracker.

“Our priority is to continue to scale up while making sure that we deliver a great service to our customers.

“We are investing in our digital transformation and recruiting in all regions of Wales to make sure that we can provide the face-toface interaction we know our customers value.”

Economy Secretary Ken Skates said: “From establishing its headquarters in Wrexham to launching new initiatives such as Angels Invest Wales, there can be no question that the Development Bank of Wales has achieved a huge amount in its first year, supporting businesses from across Wales to grow and flourish.

“I established the Development Bank because I wanted to make it much easier for our businesses to have access to the funding they need to start and expand.

“Working alongside Business Wales and other partners, it has enabled timely advice and funding to be provided simply and effectively, and directly aligned to the principles set out in the Economic Action Plan, I’ve seen first hand the difference it is making in supporting Welsh businesses of all sizes, strengthening our regional and national economies in the process.”

In its latest audited accounts, to the end of March 2018 – which included a period under its predecessor Finance Wales – it made a pre-tax profit of £4.5m.

During the year the average interest rate charged on debt was 7.3%, compred to 7.6% a year ealier. It said the wider market average was 7.79%.

Its total direct investment for the year was £68m. The regional breakdown was north Wales £17m, mid and south-west Wales £14m and south-east Wales £37m.

During the year it executed 74 equity deals, of which 32 were in Cardiff. By 2022 it has a target of making direct investments of £80m.

Mr Thorley received a total remuneration of £193,333 compared to £159,109 a year earlier, when he wasn’t eligible for the performance bonus scheme.