Cypriot banks held 20 billion euros ($26 billion) in deposits by non residents at the end of September, compared with 32.2 billion depositied by residents, the Institute of International Finance (IIF) said Wednesday based on data from the International Monetary Fund and the Central Bank of Cyprus.
The Mediterranean island, which is now negotiating a bailout with the European Union (EU), the European Central Bank (ECB) and the IMF, has allowed its banking sector to swell to the point where "by the end of 2012, its total assets amounted to 700% of GDP," or gross domestic product, an IIF research note said.
When the 13.1 billion euros raised by Greek subsidiaries of Cypriot banks and 4.5 billion euros deposited with other foreign subsidiaries were added to the non-resident figure, the foreign aggregate amounted to 37.6 billion euros, it noted.
The IIF is a global association that includes most of the world's biggest commercial and investment banks.
A breakdown of foreign-held deposits based on ECB data indicated that 85 percent, or 19 billion euros, came from countries outside the EU, with several sources pointing to Russia, Ukraine and Lebanon in particular.
Non-resident deposits declined by 12 percent between June 2011 and September 2012, meanwhile.
A plan rejected Tuesday by the Cypriot parliament would have slapped a 6.75 percent tax on bank accounts that held between 20,000 and 100,000 euros, and one of 9.9 percent on accounts that held more than that, to raise 5.8 billion euros as part of an international financial rescue package.
The ECB, EU and IMF would then have agreed to loan Cyprus 10 billion euros to help it resolve a banking crisis that has become the latest chapter in the eurozone's chronic financial drama.