New figures show that the value of deposits in Guernsey banks grew by £1.3bn (1.1%) during the first three months of the year.

This increase took the total value of Guernsey bank deposits to £118.7bn at the end of March 2010.

However, the quarter of growth follows a full year of contraction and therefore means that deposits have fallen in value by £24.2bn (17%) since the same time last year.

Peter Niven, Chief Executive of Guernsey Finance, said: "This is the first time in fifteen months that I have been able to report growth in the value of banking deposits during the previous quarter. It is encouraging that we have seen this increase – albeit small – during the first three months of this year and it reflects the greater stability in the banking sector at the moment.

"It is also important to look at the underlying trends, which provide more revealing information. For example, the returning confidence in the investor markets and a sustained low interest rate environment has resulted in a continued decline in Swiss fiduciary deposits, with a fall this quarter of nearly 6%. Other deposits – excluding the Swiss product – increased moderately to a level 5% higher than the crisis period of October 2008. These figures have been buoyed to some extent by the weakening of Sterling against other currencies but having said that, those already held in Sterling and therefore unaffected by exchange rate movements did increase slightly for the second quarter in succession."

Analysis of the figures from the first quarter of the year shows that Swiss fiduciary deposits contracted by £2.4bn (5.7%) from £41.8bn at the end of December 2009 to £39.4bn at the end of March 2010.

Overall, other deposits – excluding Swiss fiduciary deposits – increased by £3.7bn (4.8%) from £75.6bn at the end of December 2009 to £79.3bn at the end of March 2010.

The effect of exchange rate movements in the quarter was significant and this has also impacted on the overall currency mix where Sterling deposits decreased very slightly to 23.8% of the total deposit base, Swiss Franc deposits fell to 3.4%, US Dollars rose to 46.7% and Euros dropped to 22.8%.

For more information about Guernsey's finance industry please visit www.guernseyfinance.com.

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