The state-owned British Business Bank, BBB, has swung to an annual pre-tax loss of more than 147-million Pounds.

The economic development lender says wider economic problems led to a drop in the valuation of businesses it has invested in.

The bank says it made 1.6 billion Pounds of funding agreements in the year “despite the challenging economic environment”.

BBB was set up in 2014 to lend money to and buy stakes in smaller UK businesses to help them start up and expand.

The bank said the value of its investments fell by 146-million Pounds, or 5%, in the 12 months to the end of March. That compares to a gain of 619-million Pounds in the previous year.

Around the world the valuations of technology firms have fallen in recent months as investors became increasingly wary due to rising borrowing costs and weak economic growth.

The bank’s chief executive Louis Taylor said, “Given the longer-term 10-year horizon for most of our investments we would expect an overall upward trajectory despite these in-year fluctuations.”