Total deposits held with Guernsey banks at the end of March 2008 increased in Sterling terms by £10.3 billion from the end of December 2007 level of £119.2 billion to reach a new highest deposit level of £129.5 billion, representing an 8.7% increase over the quarter. Total assets and total liabilities increased by more than deposits in the quarter with a £13 billion (9.8%) increase to a new highest level of £146.1 billion.
An 11.1% increase in Swiss fiduciary deposits in the quarter reflected continued attractiveness of this business in uncertain market conditions and business increased strongly at several banks with the total for these deposits reaching £54.8 billion, an all time high. These deposits now represent 42.3% of all deposits with 11 banks in Guernsey active in this area of business at the year end. However there was also a solid 7% increase in other deposits.
Sterling strengthened slightly against the US Dollar but weakened against the Euro and the Swiss Franc, which led to a positive exchange rate effect from the weaker Sterling. At the same time there was strong volume growth in US Dollar and Euros in their underlying currencies. However Sterling and Swiss Franc business decreased in volume. The overall currency mix shows some slight changes with the proportion of US Dollars increasing slightly to 44.8% and Euros increasing to 22.7%, while the proportion of sterling deposits fell to 25.7%.
There were no new Banking Licences issued during the first quarter and none were surrendered.
Local inter-bank activity decreased to £787 million. A table is available here showing the level of the deposits and the number of licensed institutions since 1980.
Philip Marr, Director of Banking commented:
“The year has got off to a buoyant start with an 8.7% increase in total deposits. The bulk of that increase reflected volume growth in the underlying business although the weaker sterling against the euro had some effect. The volume growth was split between a further increase in Swiss fiduciary deposits and a solid increase in other deposits. These were mainly increases in corporate deposits and to a lesser extent inter bank deposits largely reflecting business growth in the funds sector. Encouragingly the growth in corporate deposits was across a range of banks”.