Gulf clients deposit more than $30bn in Jersey banks

Gulf-based clients have deposited more than $30bn in banks located in the offshore tax haven of Jersey, the head of an organisation that promotes the island as a financial centre said.

“We can’t track everything for privacy and confidential reasons, but for banking deposits approximately twelve percent of all banking deposits in Jersey come from the GCC,” said Sean Costello, the head of business development for GCC and India at Jersey Finance.

Latest figures from Jersey Finance show deposits in the island’s banks during the fourth quarter of 2010 amounted to £161.6bn ($262.2bn), some $31bn of which originated from Gulf clients.

“[Jersey] is traditionally very popular and banking deposits is one indicator, and it is a very strong one,” Costello said.

Political upheaval in the Arab world could see more capital moved to offshore bank accounts as wealthy Arabs look to safeguard their assets. The region’s sixteen largest bourses lost $140bn in the five weeks to March 4 as investors fled the market and civil uprisings spread.

“It makes sense as Jersey is a safe and secure jurisdiction and has been for the past 50 years. There are existing investors who have interests in Jersey and potentially people will be doing more there in light of recent events,” Costello said.

Formed in 2001, Jersey Finance is a non-profit making organisation set up to promote the island, which has long been seen as a popular tax haven for wealthy investors.

Banks with connections to Jersey include HSBC Middle East, Emirates NBD and National Bank of Abu Dhabi.

Emirates NBD, Dubai’s largest bank by market value, last year launched an offshore banking facility based in Jersey.

Jersey Finance recently opened an Abu Dhabi office in a bid to increase the number of Middle East financial organisations and firms with ties to Jersey.

“We have seen is, in terms of Islamic finance, a big growth. [And] we have designed specialist structures that are Shar’iah compliant,” said Costello.