The total of deposits held by Guernsey banks at the end of December fell by £508 million from the previous quarter, a decrease of 1.2%. Total deposits now stand at £43,324 million.

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

For further information contact Peter Crook on Tel: +44 (0) 1481 712 706 or fax: +44 (0) 1481 712 010 or e-mail: info@gfsc.guernseyci.com

Visit the Guernsey Financial Services Commission Web Site at Click Contact Link

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