The total value of deposits held by banks in Guernsey rose to £103.1bn at the end of June 2012, according to the Guernsey Financial Services Commission (GFSC).
Fiona Le Poidevin, Chief Executive of Guernsey Finance said it was pleasing to see the growth in the value of deposits held by banks in Guernsey during the second quarter of the year but she acknowledged it was just one quarter of data and that deposits have fallen in 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.”
The quarterly report on banking sector activity from the GFSC said that the overall growth in value of deposits was the result of both a material increase in volumes, as well as exchange rate factors. In particular, Sterling weakened against the US Dollar and strengthened against the Euro and Swiss Franc, which had a positive effect on the level of deposits expressed in Sterling, adding to the material increase in the volumes of deposits during the quarter.
The overall currency mix shows 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%.
