NICOSIA – Cyprus has received a report outlining how much money is needed to bail out its banks, the central bank said on Saturday, helping the island reach a comprehensive aid package with international lenders.
The recapitalization estimate for Greek-exposed Cypriot banks is necessary to secure a bailout deal with lenders representing the European Union and the International Monetary Fund.
"The steering committee is looking at the report from this morning, particularly the methodology used to establish the preliminary needs for the recapitalization of the banks," said Central Bank of Cyprus spokeswoman Aliki Stylianou.
The interim report, which comes ahead of a final assessment expected in January, did not contain a figure on the total amount required for the bailout, Stylianou told state radio.
"Some time is required for the steering committee to assess the methodology used to reach a conclusion on the numbers," she said.
The steering committee is made up of representatives from EU institutions, the IMF and Cypriot authorities.
Cyprus, the euro zone's smallest economy after Malta, sought aid from the IMF and the EU after its two largest banks turned to the state for financial assistance.
The banks' regulatory capital was depleted by a writedown on Greek bond holdings in early 2012, the result of a deal brokered by EU leaders to make Greece's debt mountain more manageable.
A rough working assumption for Cyprus's bailout deal has been that the banks need around 10 billion euros to recapitalize, almost 60 percent of Cyprus's entire annual output.
The bailout requirement report was carried out by Pimco, an investment company best known as the world's biggest bond trader.
It involved an asset review of five Cyprus-based banks and a stress test to determine the capital needs of each. It also covered a representative sample of co-operative credit institutions.
(Reporting By Michele Kambas; Editing by Tom Pfeiffer)