The Bermuda funds industry stabilised in the third quarter of last year, after losing more than a third of its net asset value since from mid-2008.

Figures revealed in the Bermuda Monetary Authority’s December 2009 Regulatory Update showed that the combined net asset value of Bermuda-based funds was $154.45 billion in the third quarter — down $17 million from the second quarter.

That suggests that the dramatic decline from the end of 2007 — when the Bermuda funds industry had a net asset value of almost $250 billion — may have bottomed out at the end of September.

The total number of funds in the third quarter was 1,401, a fall of 10 from the previous quarter and a fall of 270, or 21 percent from a year earlier.

After suffering from massive redemptions and a plunge in asset values during 2008 and the early part of 2009, the funds industry benefited from the rally on financial markets since last March. The S&P 500 Index rose 26.5 percent last year, recouping half the 37 percent loss of the previous year.

The BMA report also highlights a trend of increased Bermuda dollar lending over the past year. The total lent out by Bermuda’s banks and deposit companies in loans, advances and mortgages was $5.2 billion during the third quarter — 11 percent higher than a year earlier and a rise of 2.1 percent from the previous quarter.

Bermuda dollar deposits climbed at a much lower rate, climbing one percent year on year to $3.86 billion.

That meant that the percentage of Bermuda deposits loaned climbed to 134.9 percent. The shortfall, according to the BMA commentary, is made up from foreign currency denominated deposits, which primarily comprise US dollars.

Total deposits in the banking sector were $17.82 billion — a fall of 2.8 percent from three months earlier.