The 2023/24 investment enabled a further £400m in additional investment alongside the bank.

The bank exceeded its operating costs, of £16.1m, for the first time with investment income reaching £19.3m, an 80% year-on-year increase on the previous year’s £10.7m. While the loss is attributed to realised and unrealised investment losses, it represents around 2% of the year-end portfolio value.

Willie Watt, the bank’s chairman, said: “The bank was established to be an impact investor, to drive growth in our economy, provide financial returns on public capital and deliver social impact. These are long-term goals and we are operating in a challenging macroeconomic environment, which makes our progress all the more significant.

“The bank’s income exceeded operational expenses for the first time. This is significant but we are conscious that in our early years this remains sensitive to the mix of investments, continued deployment, and availability of capital to invest.

“This acceleration towards profitability has been progressive, with our income growing significantly year-on-year. A key factor in this was the clarity provided by Scottish ministers at the time of our founding, with a bold commitment to capitalise the bank with £2 billion over 10 years.

“The bank was conceived as a perpetual institution that would redeploy investment returns for the people of Scotland and we need to make this structure a reality.”

In addition to increasing its income, the bank’s committed investments rose, bringing the total amount of capital the bank has deployed since inception in November 2020 to around £640m.

The latest set of accounts reflect chief executive Al Denholm’s first full year in the role.

Mr Denholm said: “While prudently managing our risks, we have been able to increase our commitments to investee companies as they scale and grow, and we have invested in some exciting new projects, which we believe will deliver significant impact to Scotland’s economy.

“Some highlights over the past year include £100m investment with UKIB in Ardersier port, £6m for cancer therapeutics specialist Cumulus Oncology and a follow-on investment of £20m in to Thriving Investment’s mid-market rental home fund.

“As set out in our business plan, we have less capital to invest in the current financial year than we did for the period covered in these results. This will require us to be more focused, prioritising the opportunities that can maximise progress towards our missions and that are likely to attract additional capital from other investors, while ensuring an appropriate return.”