Deposits held by Guernsey banks grew another £6.5bn (5.8%) during the continuing market turmoil in the final three months of 2007.

The increase means that the total value of deposits rose by £26.85bn (29%) during the twelve months to finish the year at a new record high of £119.2bn.

The latest report from the Island's regulator, the Guernsey Financial Services Commission (GFSC), shows that there was a major increase in deposits during quarter one of last year. Quarter 2 saw comparatively steady yet continued growth and this has been followed by increasingly larger rises through the second half of 2007.

The figures represent continued solid growth in corporate business as well as increasing Swiss fiduciary deposits and other inter-bank business.

During the last three months of 2007 Sterling weakened against all major currencies, serving to inflate foreign currency deposits when expressed in pounds. At the same time there was strong volume growth in US, Dollar, Euro and Swiss Franc business in their underlying currencies, which added to the positive exchange rate effect of the weaker Sterling. Sterling business itself also increased but to a lesser extent.

The release of these figures follows the latest Guernsey investment fund results showing growth of £13.7bn (8%) during the quarter and £48bn (37%) year on year to close 2007 at a new record high of £178bn.

"These deposit figures come hot on the heels of the news that the funds industry continues to perform superbly however the results from the banking sector show that it is by no means lagging behind," said Peter Niven, Chief Executive of GuernseyFinance – the promotional agency for the Island's finance industry.

"This growth during the so-called credit crunch reflects the fact that during these uncertain times people do take more comfort out of holding cash than investments and it also shows that they are choosing Guernsey – a location in which they can have confidence. Furthermore, the fact that the Island is able to post exceptional funds figures at the same time highlights just how our financial services industry is firing on all cylinders."

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