Guernsey Financial Services Commission Fourth Quarter 2003 Banking Sector Activity

Total deposits held with Guernsey banks at the end of December 2003 decreased in Sterling terms by £1,592mn from the end of the September 2003 level of £71,295mn to £69,703mn. Total assets and total liabilities decreased by a greater figure in the fourth quarter, falling in Sterling terms by £1,806mn to £72,850mn.

There was a 2.2% decrease in deposits expressed in sterling terms, with the bulk of this decrease reflecting the impact of exchange rates effects over the quarter. In the main the decline was caused by the further strengthening of sterling against the US dollar and the Swiss franc. Indeed there were even some volume increases in the underlying base currencies. The amount of Swiss fiduciary deposits declined again in Sterling terms to stand at £25,701mn, representing 37% of the total.

Philip Marr, Director of Banking commented
"The steep climb in the sterling/dollar exchange rate had its effect on our aggregate figures in the fourth quarter of 2003 and the overall deposit total slipped below £70 billion for the first time since year 2000. In base currencies the figures have been holding up well despite the decline in the number of banks. Swiss fiduciary deposits have continued to decline under the influence of the exchange rate and the prevailing low interest rates."

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