Johnson Financial Group Inc. in Racine, Wis., said a decision to close its Cayman Islands branch is related to new laws requiring banks to pay interest on commercial deposit accounts.
The $4.2 billion-asset company will close the office in Grand Cayman on Dec. 31, according to a letter filed with the Wisconsin Department of Financial Institutions. The company opened the office in 1998. The office, which serves about 30 large commercial clients and holds about $250 million in deposits, sweeps overnight funds offshore, allowing customers to earn interest on overnight funds.
Johnson Financial also said the closing was tied to its recent sale of TransOcean Bank & Trust. The sale would have required the company to find a new — and likely more expensive — Cayman Island agent. The bank also said the government of the Cayman Islands significantly increased its yearly licensing fees.