Despite the overall decrease in deposits, nearly all the banks saw their deposit base increase with a number increasing strongly. However, the effect of large exchange rate movements between the last two reporting dates, for instance the dollar from 1.56 to 1.69 to the pound, and the drop in local interbank activity by £640 million to £1,610 million, more than outweighed the increases. With such a large percentage of the deposit base in currencies other than sterling (68%) the rate of exchange has a marked effect on the conversion of currency deposits to sterling. Indeed in the last quarter the exchange rate movements would have affected adversely total deposits by as much as £2,400 million.
Not surprisingly the decrease in deposits was all in currency with those in sterling actually increasing by £872 million.
On completing the relocation outside the island, Chemical bank (Guernsey) Limited, Chase Manhattan and Lazard Brothers & Co. (Guernsey) Limited all surrendered their banking licenses. Also, the union Discount Company closed down its subsidiary although the branch remains. A new licence was issued to Clariden Bank (Guernsey) Limited but it would not have had any effect on the overall figures yet.
Over the year, deposits fell by £3,531 million (-7.5%) compared to a rise of £4,664 million (+11.1%) in 1995. This is due to the above mentioned relocations although the strengthening of the pound and the decrease in interbank activity would also have affected the total adversely.
DEPOSITS WITH LICENSED DEPOSIT TAKERS
End No. of licenced Deposits Quarterly Yearly Period institutions £Mn Variation Variation % % 1980 43 1,800 1986 52 9,508 1987 54 8,838 1988 56 10,168 1989 58 12,992 1990 Mar 66 13,387 3.0 June 68 13,469 0.6 Sept 70 14,522 7.8 Dec 72 15,476 6.6 19.1 1991 Mar 72 16,203 4.7 June 72 16,829 3.9 Sept 71 16,156 -4.0 Dec 72 16,250 0.6 5.0 1992 Mar 73 17,849 9.8 June 72 17,673 -1.0 Sept 73 21,226 20.1 Dec 76 27,442 29.3 68.9 1993 Mar 73 30,299 10.4 June 74 32,605 7.6 Sept 75 37,595 15.3 Dec 75 37,482 -0.3 36.6 1994 Mar 74 37,773 0.8 June 73 40,320 6.7 Sept 73 41,439 2.8 Dec 73 42,191 1.8 12.6 1995 Mar 72 43,018 2.0 June 73 45,207 5.1 Sept 73 44,437 -1.7 Dec 73 46,855 5.4 11.1 1996 Mar 75 45,897 -2.0 June 76 44,917 -2.1 Sept 75 43,832 -2.4 Dec 72 43,324 * -1.2 -7.5 *of which £1,610 million constitutes local interbank deposits
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