Troubled Bank of Cyprus, the island's largest lender, announced on Friday that 229 employees have lost their jobs as the company seeks recapitalisation funds from international lenders.
"The Bank of Cyprus wishes to announce that within the context of the group's restructuring and reduction of operating costs, 229 people have left the group in Cyprus in January 2013," it said in a statement.
"With these departures, the number of staff in Cyprus has decreased by 6.4 percent and it is estimated the group will save 8.5 percent on its annual payroll costs," the bank said.
The bank asked for state assistance in June after it fell 500 million euros ($680 million) short in bolstering its regulatory capital as required by the European Union.
The island's second largest bank, Cyprus Popular, needs 1.8 billion euros to recapitalise, forcing a cash-strapped government to request an EU bailout to prop up the banking system.
Nicosia has signed a draft agreement with the troika -- European Commission, European Central Bank and International Monetary Fund -- on the terms of a loan deal, with estimates putting the amount needed at around 17.5 billion euros.
But lenders and Eurozone finance ministers are awaiting a due diligence report on the Greece-exposed Cyprus banking system to see how much the island's recession-hit economy actually needs.
They are not expected to agree a loan until March.
The Bank of Cyprus currently operates 556 branches -- 190 in Russia, 181 in Greece, 126 in Cyprus, 44 in Ukraine, 10 in Romania, four in Britain and one in the Channel Islands.
Cyprus projects its economy will slip deeper into recession in 2013 by 3.5 percent from 2.4 percent in 2012.