Sterling Offshore Banking

Building society style providers remain much smaller operations in terms of customer base and breadth of service in comparison with many banks - one of the reasons you won’t find many in Jersey.

With the exception of the Abbey National and the Alliance & Leicester, they are few and far between. Andrew Le Brun, director of policy and legal affairs in Jersey, says that despite 73 banks on the island, the jurisdiction’s exclusively high capitalisation demands kept out many building societies.

“Some of the smaller building societies like Portman settled in Alderney, close to the Isle of Man, but only institutions in the top 500, with respect to capital, can get a niche in Jersey.”

So as the poor relations of the banking capitalisation world, what do they really have to offer?

Sterling Offshore Banking - Jack Of All Trades

This is well-illustrated by a perusal of current interest rate tables for offshore sterling accounts (correct to 6 April 2001).

Rates on accounts with longer - 90 or even 180-day - notice periods will always have the edge and many offer over 6 per cent.

Sterling Offshore Banking - Abbey National Offshore

At the lower end of the deposit scale, Sun Bank Offshore is returning an impressive 6.10 per cent on a minimum balance of £10,000 for its Flexible 120-day account customers. Northern Rock is still performing well at this end with the same 6.10 rate on its Offshore Tracker 90 account, with Anglo Irish Bank also offering over 6 per cent across the tiers, including the lowest tier of £5,000 on the seven-day access Privilege II account. Many of these banks see themselves as ‘savings banks’ and competition remains fierce from month to month to offer the best rates.

Sterling Offshore Banking & Lynette Byrne

Bradford & Bingley currently offer three sterling deposit accounts: the Island Access, the Base Rate Link and the Island Notice account. All accounts are tiered and interest rate information is available on a 24 hour update line. Minimum deposits start at £10,000. The alternative currency option is the US Dollar Deposit account, which has a seven-day notice period and a minimum balance at the lower conversion threshold
of $10,000.

Byrne says that offshore product development has always run entirely independent of the onshore product range, but that all the developments have been added value, as opposed to a complete departure. “All of our product expansions are related to the core business of deposit-taking. Nothing has essentially changed,” says Byrne. “We are constantly reviewing and refocusing our lines, but additions like e-mail statements and additional currencies just embellish products with a proven track record.”

Sterling Offshore Banking & Chris Bradshaw

“We have certainly branched out and have far less homogeneity about our services than before,” says Bradshaw.

Bristol & West moved into equity-linked products eight years ago, says Bradshaw, as it wanted to offer customers something a little different.

“There are certainly a lot of people who still prefer the security of saving to investing, but we wanted to offer a half-way house for our customers, with an option of higher returns.”

Bradshaw says that there is a distinct difference between the customers who tend to select a one-year bond, as opposed to those opting for a longer term. He says that with such market volatility, it is no longer so easy to persuade cautious customers to commit to a five or six-year term.