Total deposits were £107.5bn at year end, compared with £111bn at the end of 2010.
Total assets and liabilities decreased by £5.9bn or 4% to £133.6bn over the quarter, although this was just 0.4% lower than the level a year ago, the data, released earlier this week by the Guernsey Financial Services Commission, shows.
Swiss fiduciary deposits – a tax-efficient product offered by banks that enable Swiss taxpayers to take advantage of European trust arrangements, and an important component of Guernsey’s total deposit picture – were among the categories of deposit affected by the low interest rate environment, according to Philip Marr, director of banking.
They fell by £1.6bn in the quarter to £37.7bn in December, and now represent 35% of all deposits, with seven banks in Guernsey currently active in this area of business.
“Continuing uncertainties in the Eurozone, capital pressures and the subdued economic recovery led to further deleveraging by global banks, and this was transferred through to lower balance sheets of banks in Guernsey,” Marr added, in a statement accompanying the data on the GFSC website.
“ If these global trends continue, then we may see deposit levels continuing to decline.
“That said, the total liabilities and total assets figures have been holding up rather better, reflecting the greater diversity of funding sources at some of the larger banks.”
Shift to corporate, private banking
Peter Niven, chief executive of Guernsey Finance, said the latest Guernsey banking figures represented part of a longer term trend, as industry moved from its traditional retail market to focus increasingly on the corporate sector, and on private banking and wealth management for high net worth individuals.
He added that there is an effort under way on the island to attract new entrants to Guernsey’s banking market, and in particular, “we are assessing the possibilities of complementing our activity in the ‘emerging’ markets by having names from India, China or the wider Far East set up operations in Guernsey.”
The two banks that surrendered licences during the fourth quarter were Bank Sarasin (CI), which transferred its Guernsey business to a branch operation, and now operates as Bank Sarasin & Co Ltd, Guernsey Branch; and Yorkshire Guernsey Ltd which, as reported, exited Guernsey following a strategic review that was launched last year.
This brings the number of banks licensed in Guernsey to 35, down from a peak, in the late 1990s, of 79, before amalgamations, reorganisations, consolidations and closures took their toll.
To see a table featuring Guernsey’s bank deposit data and the number of licensed institutions since 1996, click here.
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Total Guernsey bank deposits
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Total, in £bn
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% change
over quarter |
% change
over year |
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End Sept 2010
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£115.981bn
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-0.7%
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-3.5%
|
|
End Dec 2010
|
£111.030bn
|
-4.3%
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-5.4%
|
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End Sept 2011
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£114.158bn
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+0.2%
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-1.6%
|
|
End Dec 2011
|
£107.545bn
|
5.8%
|
3.1%
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Source: Guernsey Financial Services Commission
