Press Release - 10 March 2005

The Jersey Financial Services Commission has today, 10 March 2005, issued its quarterly report for the period 1 October 2004 to 31 December 2004.

Headlines:

Bank deposits increased by £8.9 billion during 2004 to £158.1 billion.

The value of collective investment funds managed in the Island ended 2004 at £104.1 billion, an increase of £1.6 billion over the 2003 year-end figure.

The number of collective investment funds and COBO funds rose during 2004 from 602 to 833.

The total value of funds under management (Class B of the Financial Services (Jersey) Law 1998) stood at £34.4 billion as at 31 December 2004. The increase in funds under management during 2004 was £3.3 billion (10.6%).

Company incorporations for the whole of 2004 totalled 2439, an increase of 13.1% over 2003.

Bank Deposits

There was a decrease in Jersey bank deposits during the quarter of 0.64% (£1.0 billion). The main reason for this was a drop in the reported sterling equivalent of the foreign currency on deposit with Jersey banks. Although during the quarter there was actually an increase in the amount of foreign currency placed on deposit, the aggregate reported sterling equivalent fell due to a substantial weakening in the US Dollar during the quarter (the majority of the Island’s currency deposits are in US Dollars).

The 2004 year-end deposits figure was £158.1 billion (see Appendix A); this represents an increase of £8.9 billion (5.96%) during 2004.

32.5% of bank deposits are held in sterling and 67.5% are held in currencies other than sterling (see Appendix B).

During the last quarter of 2004, the number of banking licences dropped from 55 to 51. This drop was the result of licences issued to certain Cayman-based banks, which invoked disaster recovery plans following the impact of Hurricane Ivan (as referred to in the September 2004 quarterly report), being relinquished.

The number of banking licences at 31 December 2003 was 55. The drop to 51 by the end of 2004 is a reflection of consolidation in the banking sector.

Figure 1

BANK DEPOSITS
(£ BILLION) AS AT 31 DECEMBER FOR EACH OF THE PAST FOUR YEARS

Funds

The Collective Investment Funds (Jersey) Law 1998 (the “Law”)
The Control of Borrowing (Jersey) Order 1958 (the “Order”)

The year-end fund figures showed an overall Net Asset Value (“NAV”) increase of 7.5% for the quarter. While all types of funds had increases in the quarter, it was the specialist type funds, such as Venture Capital, Real Property and Hedge Funds, which have shown the largest gains. As a percentage of the NAV of all funds in Jersey, specialist type funds now account for 45% compared to 26% at the end of 2003. Thus, while Jersey’s biggest sector, by value, continues to be Equity Funds, Venture Capital, Real Property and Hedge Funds grew significantly in 2004. This demonstrates Jersey’s growing importance in these niche markets.

Appendices C, D and E provide more analysis of fund statistics.

Company incorporations

The total number of incorporations during the December quarter was 620, an almost identical figure to that in the corresponding quarter of 2003.

Incorporations for the whole of 2004 totalled 2439 an increase of 13.1% over 2003. The increase was primarily due to changes in UK legislation relating to stamp duty which came into force during the year, and increased business activity in the Island.

The number of ‘fast track’ incorporations for the quarter was 258 and the number of normal company incorporations was 362. (See Notes to Editors.)

During 2004, against their self-imposed target of 95%, the Registry recorded a 98.8% rate for normal two-day incorporations and a 97.3% rate for fast track incorporations. (See Notes to Editors.)

Figure 2 illustrates the number of new company incorporations during each of the past four years. (See also Appendix F.)

Figure 2

TOTAL NEW COMPANY INCORPORATIONS DURING THE YEAR FOR
THE PAST FOUR YEARS

Investment Business

Total funds under management (Class B of the Financial Services (Jersey) Law 1998) stood at £34.4 billion at 31 December 2004.

The comparative figure for 31 December 2003 was £31.1 billion. The increase in funds under management during 2004 was therefore £3.3 billion (10.6%).

As at 31 December 2004, the total number of clients of investment managers was 19,989.

Insurance Business

The total number of insurance licences at 31 December 2004 stood at 164, of which 152 were Category A and 12 Category B (see Appendix G).

The equivalent figure at 31 December 2003 was 168. The main reason for the net fall of 4 licences during 2004 was because a number of licences were no longer needed as a result of consolidation in the Industry.

Figure 3

ALL INSURANCE LICENCES AS AT 31 DECEMBER FOR EACH OF THE PAST
FOUR YEARS

Conclusion

David Carse, Director General of the Commission, commenting on the quarterly statistics said today, ”The increase in business volumes in all sectors during 2004 reflects the improving global economy and the continuing confidence that investors and financial services businesses have in Jersey.“

For further information:

David Carse
Director General
Jersey Financial Services Commission

Telephone: +44(0) 1534 822011
Facsimile: +44(0) 1534 822001
Email: to Mr Carse's PA: l.johns@jerseyfsc.org

Notes to Editors:

1. Normal company incorporations are completed within two working days whilst fast track incorporations are completed within two hours.

2. Published timescales were introduced the week commencing 1 January 2000, and the Registry has worked to those targets throughout the last year.

Appendix A

Annual growth in Banks and Bank Deposits to date. £ Billions

Appendix B

ANALYSIS OF DEPOSITS - 31 DECEMBER 2004
ALL AMOUNTS IN £ THOUSANDS

Appendix C

COLLECTIVE INVESTMENT FUNDS (JERSEY) LAW 1988 ("THE LAW")
CONTROL OF BORROWING (JERSEY) ORDER 1958 (THE "ORDER")

SUMMARY OF STATISTICAL SURVEY OF FUNDS SERVICED IN JERSEY AS AT 31 DECEMBER 2004

From 1 October 2003 we have excluded from the figures, the collective investment funds for which a permit was issued under the Law for the function of distributor or similar minor function. However, we now collect statistics on the private schemes administered in the Island, which, although not requiring a permit under the Law, require consent under the Order (such funds are termed “COBO funds”). Funds regulated under the Law are referred to herein as “CIFs”.

COLLECTIVE INVESTMENT FUNDS (JERSEY) LAW 1998
CONTROL OF BORROWING (JERSEY) ORDER 1958

SUMMARY OF STATISTICAL SURVEY OF FUNDS SERVICED IN JERSEY AS AT 31 DECEMBER 2004

ANALYSIS OF CIFS AND COBO FUNDS

Appendix D

CIFs & COBOs

Analysis by Investment Policy Code

Appendix E

COLLECTIVE INVESTMENT FUNDS (JERSEY) LAW 1998 ('THE LAW')
CONTROL OF BORROWING (JERSEY) ORDER 1958 (THE “ORDER”)

SUMMARY OF STATISTICAL SURVEY OF FUNDS SERVICED IN JERSEY AS AT 31 DECEMBER 2004

Analysis by Class

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