A review of Guernsey’s banking industry has concluded that the “disproportionate” role played by wealth management should be seen as an opportunity to attract more wealthy clients and families to the island.

Success and Stability: A Strategic Review of Guernsey’s Banking Industry has been published by Lord Hunt, chairman of the financial services division of commercial law firm Beachcroft. It was commissioned in March this year by the island’s Commerce and Employment Department to conduct a strategic review and used interviews and consultations with industry workers and stakeholders, among other formal data gathering exercises. 

“The disproportionate contribution from banking makes its success and closely related activities a key driver of Guernsey’s prosperity…the report shows that the sector directly employs nearly 2,750 people and contributes 17 per cent of all tax revenues and an estimated £200 million ($331 million) a year to the Guernsey economy,” said Lord Hunt.

The report also states that “private banking and the provision of all professional services, including banking, to the world’s wealthy families, wherever they live, is an opportunity for Guernsey,” adding that the island would benefit from more wealthy families coming to live there.

However, the report also highlighted the challenges facing the island as a result of regulatory reforms, which entail changes to the island’s corporation tax structure as well as its popularity as an offshore jurisdiction.

“Lord Hunt also addresses the challenges facing the sector as a result of regulatory changes brought on by the banking crisis. As always we stand ready to respond to those challenges which impact on banking business in Guernsey,” said Philip Marr, director of banking at the Guernsey financial services commission.