The Scottish National Investment Bank is facing a firestorm of public and political criticism after a year marked by staggering financial losses and controversial executive compensation. The year 2025 proved to be a pivotal moment for the taxpayer-funded institution, as long-standing concerns about its high-risk strategy, questionable governance, and lack of transparency crystallized into tens of millions of pounds in permanent, irreversible write-offs. While the bank’s portfolio crumbled under the weight of failed investments, its leadership continued to receive substantial bonuses, creating a stark and politically damaging disconnect between performance and reward. This has intensified scrutiny of the bank’s foundational purpose and whether it is truly serving the interests of the Scottish public or simply channeling public funds into high-risk ventures with little accountability for the costly outcomes.
A Year of Irreversible Financial Setbacks
The institution’s financial troubles came into sharp and undeniable focus with the collapse of several key investments, dismantling any narrative that its struggles were merely temporary growing pains. The most damaging blow was the collapse of M Squared Lasers, which went into receivership in late August 2025. This Glasgow-based photonics company was not just another portfolio holding; it was SNIB’s very first investment and was consistently promoted as its flagship success story. The bank had committed a substantial £37.5 million in a mix of equity and loans, but the receivership process resulted in a complete wipeout of its stake, with the sale of assets yielding zero recovery. The final, permanent loss to the Scottish taxpayer from this single failure is projected to exceed £34 million. This event triggered swift political condemnation, with Scottish Conservative finance spokesman Alexander Stewart, a Member of the Scottish Parliament (MSP), accusing the Scottish National Party (SNP) government of adopting a “cavalier attitude” with public money, a sentiment that resonated with a public witnessing significant losses.
Compounding the M Squared disaster, the collapse of the tech firm Krucial in June 2025 added another £4.6 million in irrecoverable losses to the bank’s already tarnished record. These back-to-back failures were not isolated incidents but rather the public face of a much deeper problem within the portfolio. This negative trend was officially confirmed in the bank’s annual report for the fiscal year ending in March 2025. These records revealed a staggering £76.9 million in unrealized losses from portfolio revaluations alone, a figure that did not even account for the subsequent collapses of M Squared and Krucial. This established an unmistakable pattern of significant capital deployment leading directly to tens of millions in permanent losses with little to no demonstrable public benefit. The high-risk, high-reward strategy appeared to be delivering only the risk, leaving taxpayers to foot the bill for a series of costly misjudgments and failed ventures.
Controversy Surrounding Executive Compensation
Despite the institution’s dismal financial performance and the mounting losses of public funds, its pay policies continued to reward senior staff with generous and controversial compensation packages. In the fiscal year ending March 2025, a period defined by significant write-offs, CEO Al Denholm received a total compensation package of approximately £344,000, which included a bonus of roughly £89,000. This was not an anomaly but followed an established pattern; disclosures from the 2023–24 report had already shown an allocation of £865,000 for long-term incentive payments during a period of ongoing financial strain. This practice created a stark and unsettling contrast between the lucrative rewards being handed to executives and the disastrous outcomes being delivered for the Scottish taxpayers who ultimately underwrite the bank’s operations, fueling accusations of a profound disconnect between leadership and responsibility.
These pay practices drew sharp and direct condemnation at Holyrood’s Public Audit Committee in September 2025, where civil servants were challenged to justify the logic behind the bonus culture. Committee members questioned how large salaries and incentive payments could be defended while the bank was actively writing off millions in taxpayer funds. While officials like Gregor Irwin defended the incentive plans as “carefully constructed” to balance short-term losses with the pursuit of long-term gains, this argument failed to satisfy critics. Conservative MSP Graham Simpson directly questioned whether multimillion-pound write-offs constituted an “acceptable level” of risk for a publicly funded bank. For taxpayers who absorb all the downside risk of these investments, the rationale for such generous incentive structures remains highly questionable and politically fraught, undermining public trust in the institution’s governance and oversight.
Misalignment with the Bank’s Core Mission
Beyond the direct financial hits, the bank’s investment choices have raised serious doubts about its commitment to its foundational “mission-led” objectives of tackling inequality and addressing market failures. A prime example is the £50 million investment in a Gresham House forestry fund, which was ostensibly intended to support Scotland’s net-zero goals. However, critics, including respected land reform analyst Andy Wightman, have forcefully argued that the public funds were instead fueling a speculative bubble in Scottish land prices. The fund’s aggressive acquisition strategy, which has seen it amass over 73,000 hectares to become Scotland’s second-largest private landowner, involved paying premium rates for assets, such as a hill farm purchased for over £12 million. This activity was seen as creating unsustainable inflation in land values, carbon credits, and forestry grants, benefiting wealthy investors rather than the public.
This investment has also been accused of exacerbating long-standing societal issues rather than solving them. Instead of reducing inequality, the deal was criticized for enriching large investors while sidelining rural communities and reinforcing concentrated land ownership, a deeply rooted problem in Scotland. Organizations such as Community Land Scotland argued that the investment ran directly counter to the bank’s mission and urged it to exit the deal. An investigation uncovered a further troubling circularity in the use of public funds: the Gresham House fund, backed by SNIB’s public money, was also receiving millions in public forestry grants. Having already received £3.4 million, it was projected to receive up to £11 million by 2031. This arrangement meant taxpayer money was effectively being used twice: first as investment capital and then as grants to subsidize the returns on that same capital, diminishing any net benefit for the public and renewing deep-seated doubts about the bank’s judgment.
