Banking and Financial Services
Although the number
of banks established in the Isle of Man has fallen slightly
over recent years, the calibre and scale of banking
operations has been showing marked improvement. The
Royal Bank of Scotland International, the Royal Bank
of Canada, Coutts (Northern European HQ) and Merrill
Lynch have all moved to the Isle in the last few years
and NatWest has ring-fenced its offshore business by
moving to the Island.
In May 2012, there
were 33 Class 1 Deposit Taking institutions.
Total deposits were
GBP47.01bn on December 31, 2011, having steadily fallen
from a peak of GBP57.29bn on December 31, 2008. Total
bank deposits have, however, more than doubled since
1999.
Some of the recent
decreases in the value of deposits can be explained
by movements in exchange rates, and the jurisdiction's
banking sector has remained in robust health despite
the recent financial crisis.
“The global economy has
entered one of its worst periods in living memory and
the double impact of a banking crisis followed by a
global recession which in turn may cause more damage
to the banking industry remains a cause for concern.
Even with interest rates held at an historic low we
are seeing that the cost of credit is still rising.
As the recession continues, conditions for businesses
will become more difficult as time plays its role. The
Isle of Man has nevertheless fared very well so far,”
an FSC report observed in 2009.
The Island's banking industry
is dominated by subsidiaries or branches of the main
UK clearing banks and some foreign banks. The majority
of banks in the Isle of Man are engaged in providing
private banking services to UK expatriates and to foreign
nationals. The services offered often extend beyond
deposit taking to establishing and administering trusts
and managing the underlying companies and assets held
by those trusts, including investment management.
The government announced in July
2001 a 'Financial Services Ombudsman Scheme' which covers
complaints about financial advice and products across
the range of personal finance such as banking, credit,
insurance and investments. As of 1st August 2008 the
legislation under which the Financial Services Ombudsman
Scheme (the Scheme) is established changed from the
Financial Supervision Act 1988 as amended by the Fair
Trading (Amendment) Act 2001, to the Financial Services
Act 2008.
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