Guernsey Finance

Core banking deposits in Guernsey fell by 2.3% during the third quarter of 2009 but remain marginally up on the same time 12 months earlier.

The value of these core deposits reached a total of £75.4bn at the end of September this year.

“What we can see is that core Guernsey bank deposits are in fact remaining quite robust and have now reached a similar level to their value just prior to the credit crunch and the subsequent financial crisis,” said Peter Niven, Chief Executive of Guernsey Finance – the promotional agency for the Island’s finance industry.

Total bank deposits (also including Swiss fiduciary deposits) reached £120.2bn at the end of September – down £4.4bn (3.5%) during the third quarter of the year and reducing £36.8bn (11.8%) year on year.

Figures from the Guernsey Financial Services Commission (GFSC) show that a major reason for the decline is the fall in Swiss fiduciary deposits. They stood at £44.8bn at the end of September 2009, which is a reduction of 5.5% during the third quarter and down 26.6% on the same time 12 months previously. These figures illustrate that this product remains relatively uncompetitive in a low interest rate environment.

Mr Niven added: “Looking at the data we can see that the continued decline in total Guernsey bank deposits is being largely driven by one particular product – the Swiss fiduciary deposits – and in fact others such as the local interbank market are performing more resolutely. On top of this, it is also positive to hear of signs that deposit levels were beginning to stabilise during the last month of the quarter.”

The overall currency mix shows Sterling deposits are the third largest down at 22.7%, behind US Dollars up to 46.3% and Euros down to 24.4% all followed by Swiss Franc deposits up to 3.6%.

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