The value of bank deposits in Guernsey declined by £6.2 billion (6%) in the third quarter of the year.
The new figures from the Guernsey Financial Services Commission (GFSC) show that the total value of deposits held by banks in Guernsey fell to £96.9 billion at the end of September 2012, representing a decrease of £17.2 billion (15.1%) compared to the same time last year.
Fiona Le Poidevin, Chief Executive of Guernsey Finance – the promotional agency for the Island’s finance industry internationally, said: “While it is disappointing to see the value of deposits held by banks in Guernsey fall during the third quarter of the year, it should come as no surprise considering the difficult global economic situation and in particular, the conditions for banks who continue to contract their balance sheets due to deleveraging. In addition, the low interest rate environment continues to have a significant negative impact on the attractiveness of having funds on deposit in a bank and as such, investors are moving capital into other higher yielding products.
“Having said that, increasing the number of banks operating in Guernsey remains an industry objective and was something we concentrated on during our recent visit to China. Similarly, we will be meeting with Indian banking groups while visiting Mumbai next week to highlight the potential opportunity for them to establish an operation in Guernsey.”
The quarterly report on banking sector activity from the GFSC said that the fall in the value of deposits was the result of both a material decrease in volumes, as well as exchange rate factors. In particular, Sterling strengthened against the US Dollar, Euro and Swiss Franc, which had a negative effect on the level of deposits expressed in Sterling, adding to the material decrease in the volume of deposits during the quarter. The overall currency mix shows that the proportion of deposits in Sterling is 25.1%, US Dollars is 51.7%, Euro deposits 14.9% and Swiss Franc deposits 3%.
Category: Finance & Business