Guernsey Bank Deposits Rise
Thursday, August 18, 2011

Total deposits held with Guernsey banks at the end of June 2011 increased in sterling terms by GBP1bn from the end of March 2011 level of GBP112.9bn, the Guernsey Financial Services Commission has revealed.

This represents a 0.9% increase over the quarter though it is still 2.5% lower than the same time a year ago.  Total assets and liabilities increased by GBP1.8bn to GBP139.2bn representing a 1.3% increase over the quarter, and 2.1% higher than the level a year ago.

Swiss fiduciary deposits increased by GBP2.1bn to GBP40.4bn in June and these now represent 35.5% of all deposits with seven banks in Guernsey currently active in this area of business.

Sterling weakened and exchange rates moved in the same direction during the quarter against all three of the main currencies, thereby giving a positive boost to the level of deposits expressed in Sterling. This more than outweighed the modest decrease in the volume of deposits during the quarter. However the figures in the underlying base currencies show that the picture was not uniform: deposits in Euros increased by 4.7% and deposits in Swiss Francs increased by 9.1%, though deposits in US Dollars decreased by 1.5% and Sterling fell by 3.9%. This led to some movement in the overall currency mix: the proportion of deposits in sterling decreased to 23.6% and deposits in US Dollars decreased to 47.1%, while Euro deposits increased to 21.2% and Swiss Franc deposits increased to 4.4%.

No banking licences were surrendered during the second quarter. As part of a restructuring, one new licence was issued to Bank Sarasin & Co. Ltd, Guernsey Branch, in May, to operate alongside the subsidiary Bank Sarasin (CI) Limited which will surrender its banking licence once its business has been transferred to the Branch.

Philip Marr, Director of Banking commented: “No clear pictured emerged in this quarter. For a second quarter Swiss fiduciary deposits unexpectedly increased but there were declines in corporate and inter-bank deposits. However the weakening of sterling meant that the overall modest volume decrease was outweighed by the foreign exchange effects pushing the deposit figures higher in sterling terms. Issuance of non-deposit paper continued in the quarter to edge the total liabilities figures further upwards.”