Guernsey Bank Deposits Fall 6.8% in 2002

by Jason Gorringe, Tax-News.com, London

21 March 2003

Money deposited in Guernsey's banks fell 6.8% during 2002, recording its first decline since 1996, according to the Guernsey Financial Services Commission.

A report from the Guernsey Press and Star shows that at the conclusion of 2002, bank deposits stood at a figure of £71.943 billion, down from £77.211 billion in January of the same year. However, the figures record a modest increase in deposits in the final quarter, to the tune of £122 million.

Phillip Marr, Director of banking at the Commission remained upbeat, choosing to focus on the moderate uptrend at the end of last year. "Indeed, deposit levels at the end of December could be regarded as broadly the same as the end of September," he announced, observing: "This is encouraging."

However, Marr did add a more cautionary note regarding the impact that the EU savings directive will have on bank deposits suggesting that: "we will need to monitor the trends in 2003 to see if there are any movements in response to the continuing uncertainties in the financial markets and the additional uncertainty caused by the EU savings directive proposals."

The number of licenced institutions has also fallen with the number now at 67. This is the lowest level since 1989, according to the Guernsey Press. Bank Hofmann (Guernsey), Barclay's Finance Company (Guernsey) and Woolwich Guernsey all surrendered their licenses last year. Nevertheless, activity between banks saw a rise of £113 million to £1.092 billion in the same period. The dollar remained the most popular currency, accounting for 42.8% of deposits last December. Sterling accounted for 31.9%, the euro 19.8%.

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