The decline was reduced by a net gain of £1bn during the second quarter, however, as Swiss fiduciary deposits increased in value by £2.1bn.
Guernsey Finance says a modest decrease in volumes during the quarter was outweighed by foreign exchange effects, which boosted the value of deposits in sterling terms. The Swiss franc has risen by over 10% against sterling this year, for example, according to Financial Express.
There was some movement in the overall currency mix, with the proportion of deposits in sterling and dollars falling, and the share of deposits in euros and Swiss francs increasing.
“Whilst overall there was growth in the total value of deposits, this was the result of an increase in value of Swiss fiduciary deposits and it is disappointing to see that core deposits decreased in value during the quarter,” said Peter Niven, chief executive of Guernsey Finance.
“This was partly due to the exchange rate effect caused by the weakening of sterling against other currencies but nevertheless, it is a development which will need to be monitored closely going forward.
“Of course, the figures pre-date the sovereign debt crisis of the last month so these international events, combined with the expected continuation of low base rates, will need to be kept in mind when analysing the third quarter figures.”
