Total deposits held with Guernsey banks at the end of March 2011 increased in sterling terms by £1.9 billion from the end of December 2010 level of £111.0 billion up to £112.9 billion. This represents a 1.7% increase over the quarter but was 4.9% down on the same time a year ago. Total assets and liabilities increased to a greater extent, rising by £3.3 billion to £137.4 billion representing a 2.4% increase over the quarter. However that level is marginally (0.4%) below the level a year ago.
Swiss fiduciary deposits increased by £0.9 billion to £38.3 billion in March and these now represent 33.9% of all deposits with 7 banks in Guernsey currently active in this area of business. Corporate and interbank deposits also increased across a range of banks. There was continued issuance of non deposit paper by banks in the first quarter to assist parental funding thereby increasing the total liabilities figure.
Exchange rates moved in different directions and overall would have had a negative effect on the level of deposits expressed in sterling but the increase in the volume of deposits was strong enough to outweigh the foreign exchange effects. Looking at the figures in the underlying base currencies shows the true story: deposits in US Dollars increased significantly by 7.2% and deposits in Euros increased slightly by 0.4% while deposits in Swiss Francs decreased by 7% and deposits in sterling decreased by 0.9%. This led to some movement in the overall currency mix; the proportion of deposits in sterling increased to 24.7%, deposits in US Dollars increased to 48.0% and in Euros deposits increased to 20% but Swiss Franc deposits decreased to 3.7%.
No new banking licences were issued during the first quarter and none were surrendered. MeesPierson (C.I.) Limited changed its name in January to ABN AMRO (Guernsey) Limited after the change in ownership of its parent bank last year.
A table is available here showing the level of the deposits and the number of licensed institutions since 1996.
Philip Marr, Director of Banking commented:
“The overall story this quarter was of an increase in the volume of deposits but that volume increase was trimmed back in sterling terms by foreign exchange effects. There were no clear cut trends with mixed movements in balance sheets including both contractions and expansions. There were positive increases in deposits from non-financial corporations. Unexpectedly Swiss fiduciary deposits in currency increased during the quarter although the element of sterling Swiss fiduciary deposits continued to decrease. There was further issuance of non deposit paper for group capital raising purposes which drove the total liabilities figure higher.”