The social lender Charity Bank lost £804,000 in 2013 and expects to report larger losses this time next year.
Charity Bank’s 2014 Portfolio report, Lending for a Better Future, published today, shows it had an income of just under £3m and an expenditure of almost £3.8m in 2013.
The bank, which gave up its charitable status in 2013 because of changes to financial rules on capital introduced in response to the economic downturn, restructured in a bid to become a "major and permanent fixture in social sector financing in the UK", the report says.
Income was down by £829,000 compared with 2012, when it had a surplus of £106,000.
"Our restructuring had financial implications for our operating performance," the report says. "Capital constraints restricted our lending and, therefore, the income we could earn, and we had to make significant investments in resources and infrastructure to support our intended growth."
The report says the bank expects to report larger losses in 2014, before returning "close to break-even in 2015". It says the bank expects to return to profit from 2016.
The social investment wholesaler Big Society Capital announced in April that it was paying £14.5m to take a majority stake in the bank, which Charity Bank said would enable it to increase the amount it lent to charities from £55m to about £250m by the end of 2018.