RCB bank denied late on Friday that a decision by German banking behemoth Deutsche Bank AG to “severing ties” with Cyprus-based RCB was in any way connected to allegations that the Cypriot lender, was involved in offshore transactions of up to €2bn to associates of Russian President Vladimir Putin.
According to a story run by Bloomberg earlier on Friday, Deutsche Bank has decided to exit its correspondent banking relationship with RCB, which holds Euro- and US dollar-denominated accounts with the German lender.
Citing two unnamed sources, Bloomberg said the decision may have been made earlier but expedited due to the Panama Papers leak – a trove of documents from the internal database of Panamanian law firm Mossack Fonseca, which incorporates shell offshore companies for its clients.
According to a report in The Guardian – which has access to the leaked data – earlier this week, RCB was involved in transactions that appeared to have been made in favour of individuals with close ties to Putin.
Deutsche Bank, Bloomberg claimed, started a process of “off-boarding selected clients in areas of higher risk” as early as January, suggesting the move was probably unrelated to the Panama Papers leak.
“The audits that RCB has undergone show that it has fully worked in compliance with accepted practice,” VTB head Andrey Kostin was quoted as saying on Thursday.
“There are constant checks from the European Central Bank, so it’s impossible to do anything illegal.”
But RCB told Reuters later on Friday that Deutsche Bank’s decision to disengage from the Cypriot lender was in no way connected to the Panama Papers affair.
“RCB Bank categorically denies any connection between the Panama Papers affair and the choice of Deutsche Bank to disengage from its clearing business in some regions,” RCB said in an emailed statement to Reuters.
“We were informed about Deutsche Bank’s decision well before the Panama Papers affairs. More specifically, we were informed about this decision, which we understand forms part of Deutsche’s change in strategy, on March 21, 2016.”
RCB’s cooperation with Deutsche Bank is still in force during a transition period, the bank said.