Guernsey Financial Services Commission Fourth Quarter 2004 Banking Sector Activity

Total deposits held with Guernsey banks at the end of December 2004 increased in Sterling terms by £1,778 million from the end of the September 2004 level of £68,648 million to £70,426 million. On the same basis, total assets and total liabilities increased by £1,683 million to £74,948 million.

The 2.6% increase in deposits was driven by an increase in volume, despite the strengthening of Sterling against the US Dollar. US Dollar deposits were up 8.6% in their underlying currency though Euro deposits were down 0.9% when expressed in their underlying currency. Sterling deposits were up 3.3% in the quarter.

Philip Marr, Director of Banking commented: "Deposits were up in the fourth quarter and up 1% over 2004 as a whole. Although there were exchange rate changes it was encouraging that there were genuine volume increases in both US dollars and sterling. Indeed the annual increase of almost 3% was more noticeable when measuring total liabilities. This figure captures the increases in short term paper issued by banks which is supplied to meet the demand for structured products from private banking clients. Although the number of licensed banks has declined it is evident in 2004 that a smaller number of banks were transacting a higher level of banking business."

To read the press release in full, please visit the press section of www.gfsc.gg