Second Quarter 2012 Banking Sector Activity

14th September 2012

​Total deposits held with Guernsey banks at the end of June 2012 increased 2.1% in sterling terms by £2.1 billion from the end of March 2012 level of £101 billion, up to £103.1 billion. This is 9.4% lower than the same time a year ago.  Total assets and liabilities increased by £2.9 billion to £131.2 billion representing a 2.3% increase over the quarter though this was 5.7% lower than the level a year ago.  The higher figures reflected the effects both of volume and exchange rate factors.  

Volume increases were significant as Swiss fiduciary deposits increased over the quarter by £2.1 billion to £35.8 billion in June.  These now represent 34.7% of all deposits with 7 banks in Guernsey currently active in this area of business.  

Sterling weakened against the US Dollar and strengthened against the Euro and the Swiss Franc. This had a positive effect on the level of deposits expressed in sterling, adding to the material increase in the volume of deposits during the quarter. The figures in the underlying base currencies show that deposits in US Dollars increased by 0.6%, deposits in Euros increased by 2.2% and deposits in Swiss Francs increased by 4.7% but deposits in Sterling decreased by 3.4%. This led to some movement in the overall currency mix; the proportion of deposits in sterling decreased to 24.4% while and deposits in US Dollars increased to 47.7%. Euro deposits decreased to 18.5% but Swiss Franc deposits remained at 3.3%. 

No new banking licences were issued during the quarter and none were surrendered.

A table is available here showing the level of the total deposits and total liabilities and the number of licensed institutions since 1996. 

Philip Marr, Director of Banking commented:

“On the face of it this is positive news about the level of deposits in June.  However I would caution against relying on one quarter’s data and concluding that we have turned a corner and have resumed growth.  The underlying story to date is that we are on a declining long term trend as global banks continue to contract their balance sheets because of deleveraging. We have seen month to month swings in deposits from corporates especially financial corporates which have recently been noticeably wide.  A recent feature has been that upswings one month are reversed the next.  We expect those swings in corporate deposits to continue so it would be premature to say that an upward trend has resumed.”