Total deposits held with Guernsey banks at the end of September 2011 increased in sterling terms by £0.3 billion from the end of June 2011 level of £113.9 billion up to £114.2 billion. This represents a 0.2% increase over the quarter though it is still 1.6% lower than the same time a year ago. Total assets and liabilities increased by £0.3 billion to £139.5 billion representing a 0.2% increase over the quarter and this was 1.0% higher than the level a year ago.
Swiss fiduciary deposits decreased by £1.1 billion to £39.3 billion in September and these now represent 34.4% of all deposits with 7 banks in Guernsey currently active in this area of business.
Sterling weakened against the US Dollar but strengthened against the Euro and Swiss Franc giving a positive boost to the level of deposits expressed in sterling which more than outweighed the modest decrease in the volume of deposits during the quarter. However the figures in the underlying base currencies show that deposits in US Dollars decreased by 1.4%, deposits in Euros decreased by 1.1% and deposits in Swiss Francs decreased by 1.6% though deposits in Sterling did increase by 0.8%. This led to some movement in the overall currency mix; the proportion of deposits in sterling increased slightly to 23.8% and deposits in US Dollars increased to 47.7%, while Euro deposits decreased to 20.1% and Swiss Franc deposits decreased to 4.1%.
No new banking licences were issued during the quarter but two banks surrendered their licences. Close Bank Guernsey Limited surrendered its licence following its amalgamation with Kleinwort Benson (Channel Islands) Limited while D.A.H. Hambros Bank (Channel Islands) Limited surrendered its licence as its original business rationale was no longer viable.
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:
“Although deposits were slightly up in sterling terms over the quarter because of exchange rate factors this does not reflect the underlying story. In their base currencies the component parts showed decreases in US Dollars, Euros and Swiss Francs. Business in sterling however was up somewhat. This lower level of currency business reflected a resumption in the downward trend of Swiss fiduciary deposits and a general deleveraging across the banking sector.
Of the two licence surrenders DAH Hambros’ closure was the result of its original Hong Kong private banking purpose having run its course and its economic model no longer being sustainable. The surrender of Close Guernsey Limited’s licence did not strictly amount to a closure but an amalgamation of its business into that of Kleinwort Benson (CI) Limited which had acquired the Close Offshore Group earlier in the year. Although the licence was surrendered the business was retained within the Bailiwick. “