Guernsey's finance industry is continuing to perform robustly despite the credit crunch, according to Peter Niven, Chief Executive of Guernsey Finance.
Figures released last week by the Guernsey Financial Services Commission (GFSC) show that the value of funds under management and administration in the Island grew by 1.7% over the quarter to the end of June and banking deposits fell by 1.1% during the same period.
"The figures show that flows of business into the Island have slowed over the past few months. This reflects the fact that in the wider markets there is less confidence as a result of the credit crunch. Not withstanding this, it is encouraging to see that overall Guernsey's finance industry continues to perform robustly," said Mr Niven.
Overall funds business now stands at a record £207.2bn – up £3.4bn (1.7%) over the second quarter of the year and has increased by £51.6bn (33.2%) from the same time in 2007.
"It is very good news indeed that despite the market conditions we are still seeing funds business coming into the Island," added Mr Niven.
"There is still a lot of international corporate wealth out there looking for a structure and that is what we are so experienced and skilled at catering for but what we need to see is greater confidence to put the business into place.
"As a result of this fragile confidence we have seen a slowdown in the growth of our funds business but in some respects this has been beneficial. At the current rate practitioners can make sure that service levels on the substantial business that they have taken in over the past few years are as high as we would expect and that they are well placed for when confidence returns and business levels increase."
Total deposits held with Guernsey banks fell by £1.4bn (1.1%) during the quarter to reach £128.1bn at the end of June 2008. Swiss fiduciary deposits decreased by 3.9% during the period but other deposits, mainly in Sterling and Euro, continued to move upwards. Year on year deposit levels have increased by £20bn (18.5%).
Mr Niven added: "What is encouraging is that we are continuing to see deposits coming into the Island. We have seen a drop in deposits this quarter primarily because a block of Swiss fiduciary business was transferred out of the jurisdiction to another part of the group but other deposits continue to increase. Those in the market are aware that there are some very good deposit products provided by the banks and building societies in Guernsey."
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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