The number of active partnerships in the Cayman Islands has grown by 13 per cent in 2012, following the same increase in 2011 and a 9 per cent growth in 2010.
Exempted limited partnerships are often used as an alternative to corporate mutual funds and unit trusts. According to statistics by the General Registry, new partnership formations rose by 7.4 per cent. The total number of partnerships on the register is just below 13,000.
Partnerships were the only registered entities that showed significant growth in 2012. During an average year for new company formations and a slight decline from 9,064 in 2011 to 8,971 in 2012, the total number of active companies on the register rose by 1 per cent to 93,611 as terminations declined. This is just under the year-end record high of 93,693 in 2008. However, during five of the past 10 years, new company formations were higher than in 2012.
Meanwhile, the number of funds licensed or registered by the Cayman Islands Monetary Authority dropped by 2 per cent last year to 8,950, if the new registration requirement for master funds is not taken into consideration. Including the newly registered 1,891 master funds, the total number of funds registered by the monetary authority jumped 17.1 per cent to 10,841 despite a decline in the fourth quarter of 2012.
Both the number of banks and trust companies also fell by 3.4 per cent to 226 and 142, respectively, last year, while the captive insurers remained stable increasing by two to 741. Registered private trusts increased by 12 to 77.
Economy grows slowly
The mixed results in the number of registered entities is reflected by the subdued economic performance of the financial services sector during 2012. During the first nine months of last year, the economy was estimated to have grown by 0.8 per cent, in line with the growth of the financial industry.
The third quarter economic report released by the government’s Economics and Statistics Office notes that the annualised gross domestic product growth rate for the Cayman Islands has slowed compared to last year’s 1.2 per cent.
“The economy continued to post moderate growth amidst slow demand for financial services arising from heightened uncertainty in the global economy,” Cayman Islands Premier Juliana O’Connor Connolly said.
While construction, transportation, tourism and retail sectors supported the economy, real estate, renting and business activities, and utility sectors suffered setbacks, the report said.
“Nevertheless, we are hopeful some of the private-public sector projects will come to fruition early in  to sustain local economic activity,” the premier added.
Price increases mirrored economic growth with the Consumer Price Index rising by 0.9 per cent. Higher prices for clothing (6 per cent), food (4.4 per cent), transport (2.9 per cent) and health services (1.8 per cent) were partially offset by lower costs for housing and utilities.
The 2012 unemployment rate forecast remained at 6.3 per cent, according to the report. Current work permits grew by 4.3 per cent to 20,193 in the third quarter of 2012, compared to a 5.2 per cent fall a year earlier. Civil service employment increased by 1.7 per cent to a total of 3,625, mainly due to the hiring of law enforcement officers, the report noted.
Lending to domestic households improved during the period by 9.3 per cent, representing largely property loans. But credit to businesses contracted by 11.9 per cent as lending to the major sectors declined.
The weighted average lending rate on KYD fell by 32 basis points from 6.62 per cent in September 2011 to 6.30 per cent during the same period of 2012. The Cayman Islands prime lending rate remained constant at 3.25 per cent.