Guernsey bank deposits reach £103.1bn at the end of H1

The value of bank deposits in Guernsey grew by £2.1bn (2.1%) in the second quarter of the year, according to figures released by the Guernsey Financial Services Commission.

At the end of June, the total value of deposits held by banks in Guernsey rose to £103.1bn, which however represents a decrease of £4.4bn since the beginning of the year, and of £10.7bn since June 2011.

The overall currency mix showed that the proportion of deposits in sterling is 24.4%, US dollars is 47.7%, euro deposits 18.5% and Swiss franc deposits 3.3%.

“It is particularly positive to note that while some of the growth was due to exchange rate factors, there was also a notable material increase in the volume of deposits during the quarter,” said Fiona Le Poidevin (pictured), chief executive of Guernsey Finance, the promotional agency for the Island’s finance industry internationally.

She added that data only refer to one quarter and that deposit levels have fallen during the last three years.

“This is in line with what is being seen in other similar jurisdictions and it is not surprising considering the 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,” she said.

The latest figures for the funds industry show that the value of business in Guernsey has grown during each of the two quarters of the year so far and is up nearly 60% in the last three years.

During the first seven months of the year, there has been net growth of 52 licensed international insurance entities, taking the total number to 739 at the end of July.

“This shows the great strength of having a diverse finance industry and it means that, in broad terms, it is performing strongly in what are difficult global economic conditions,” Le Poidevin said.

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