ARTICLE
22 August 1996

Relocation Effect On Deposits

Guernsey Environment
The total of deposits held by Guernsey banks at the end of June fell by £980 million from the previous quarter, a decrease of 2.1%. Total deposits now stand at £44,917 million of which £2,533 million constitutes local interbank activity.

Most of the banks saw some increase in deposits with quite a number increasing strongly. However, the imminent departures of Chemical Bank and Lazards are already having an impact as between them some £900 million of deposits were relocated outside the Island.

Some of the fall in deposits may be explained by the noticeable increase in investment business in this quarter reported last week. Movements in the exchange rate would also have affected the deposit total adversely as over the quarter sterling strengthened against the dollar, deutschmark and Swiss franc. Once, again the decrease in deposits was all in currency with those in sterling actually increasing by £577 million. The split of the total deposits is now 72% in currency to 28% in sterling.

One new banking licence was issued during the quarter when Bank of Cyprus opened a subsidiary towards the end of the quarter. No licences were surrendered.

A table showing deposits since 1980 is listed below.

Deposits with licensed deposit-takers

End      No.of licensed   Deposits    Quarterly        Yearly
Period   institutions       £Mn       Variation       Variation
                                          %               %

1980          43          1,800                         68.2
1981          42          2,691                         49.5
1982          41          3,307                         22.9
1983          41          4,243                         28.3
1984          45          5,838                         37.6
1985          47          7,209                         16.7
1986          52          9,508                         31.9
1987          54          8,838                         -7.0
1988          56         10,168                         15.0
1989          58         12,992                         27.8
1990 Mar      66         13,387          3.0
     Jun      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
     Jun      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
     Jun      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
     Jun      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
Note: Deposit figures prior to 1985 do not include deposits with clearing banks' branches. The increase of 16.7 per cent for 1985 is the increase in deposits with non-clearing banks.

* of which £2,533mn constitutes local interbank deposits.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Peter Crook on Tel: +44 (0) 1481 712 706 or fax: +44 (0) 1481 712 010.

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

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More