Survey of Financial Institutions GVA & Productivity - 2015

Wednesday 29 June 13:54

JERSEY CHAMBER OF COMMERCE NEWS RELEASE Response to: Survey of Financial Institutions GVA & Productivity - 2015

A 1% drop in GVA (Gross Value Added) of Jersey’s Finance sector is disappointing. The £1.71 billion in 2015, compared to £1.72 billion the previous year has been primarily driven by the performance of the banking sub-sector. The continuing restructuring driven by regulation including UK ring-fencing and a low interest rate environment is impacting profits, as the net interest margins banks can achieve with an effective sterling base rate of 0.5%, is limited.

Although the overall Brexit impact to Jersey and its financial services sector remains unclear, and no doubt will do so for some time, Jersey has in the past provided a useful safe harbour in times of volatility and hopefully this will be the case over the next year or so.

The 8% rise in employment costs are no doubt a representation of the continuous need for up-skilling in the sector and the demand for highly skilled staff. However, if Jersey’s financial services sector is to report growth in 2016, the government must permit the appropriate immigration of skilled staff, as well as the continuous support of training local residents.

The 5% growth (£390m 2014 - £410m 2015) in the trust sub-sector is positive news, the ongoing consolidation of the sector has no doubt contributed to the growth in this sector because of greater investment in marketing and cross-selling of services.

The Vice Chairman of the Chamber of Commerce Finance Committee, Robert Kirkby said: “Whilst the overall drop by 1% in Jersey’s finance sector is not the news the industry was hoping for, there are areas of positive growth in trust administration and legal, and despite the recent fall-out from the Panama Papers, Jersey continues to be a well-respected and regulated jurisdiction in the global financial services industry. Pre Brexit indications for growth in the finance sector in 2016 were positive, where the health of the industry lands by the year end is unclear.”

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