Total deposits held with Guernsey banks at the end of September 2007 increased in Sterling terms by £4.6 billion from the end of the June 2007 level of £108.1 billion to reach a new highest deposit level of £112.7 billion, a 4.2% increase on the quarter. Total assets and total liabilities increased by £6.9 billion (5.8%) to reach a new highest level of £126.7 billion.
The first quarter had seen a major volume increase in deposits from financial institutions at a small number of large banks but the second quarter showed a resumption of more normal growth rates with business growth coming from a range of banks. This quarter the growth rate has quickened further with net new deposit business coming principally from financial institutions in Guernsey, banks elsewhere, corporate customers and particularly from Swiss fiduciary deposits.
An 8.9% increase in Swiss fiduciary deposits reflected increased business at several banks with the total for these deposits reaching £44.6 billion, an all time high. These deposits now represent 39.6% of all deposits with 14 banks in Guernsey currently active in this area of business.
There was strong growth in US Dollar, Euro and Swiss Franc business although sterling business was down reflecting portfolio decisions by retail depositors in taking account of the instability in credit markets during the period. The overall currency mix shows some slight changes with the proportion of US Dollars increasing to 44.1% and Euros increasing to 20.6%, while the proportion of sterling deposits fell to 29.4%.
There were no new Banking licences issued during the third quarter and none were surrendered.
Local inter-bank activity increased to £1,183 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:
“In a period affected by the instability in the credit markets it was encouraging that overall there was further growth in deposits compared with the second quarter. There were adjustments in retail depositors’ portfolios resulting in a net decline in sterling business. However this was outweighed by the stronger growth in business in other currencies which was principally institutional and corporate business driven mainly by growth in deposits from banks, funds, private equity companies, other corporates and Swiss fiduciary deposits”.