Cyprus’ RCB Bank to close, cites Russia’s Ukraine invasion

NICOSIA, Cyprus — RCB Financial institution in Cyprus stated Thursday an “extraordinarily risky geopolitical state of affairs” has prompted it to wind down operations and switch itself into an asset administration firm.

The announcement got here precisely a month after the beginning of Russia’s invasion of Ukraine. At the moment, the financial institution introduced that Cypriot shareholders had acquired all the 46.29% stake in its share capital beforehand held by Russia’s VTB Financial institution.

The financial institution on Thursday stated in a press release that regardless of its “ample liquidity,” it is going to instantly cease opening new accounts or giving out new loans following an settlement with the European Central Financial institution.

Auditors Deloitte have been appointed to handle the financial institution’s transition and assist settle all its obligations to depositors. The financial institution will stick with it enterprise with present shoppers as common till its transition is full “within the coming months.”

Earlier this week, the financial institution introduced a 556 million-euro ( $611 million) sale of its mortgage belongings to Cyprus’ Hellenic Financial institution. Central Financial institution officers who spoke on situation of anonymity stated the sale buttresses the financial institution’s liquidity to “totally cowl” all its obligations to depositors amid considerations over a gentle stream of withdrawals over the previous few weeks.

Total deposits previous to the acquisition of VTB’s stake amounted to 1.5 billion euros ($1.65 billion). Some 67% was held by Cypriots, though that share has since dropped to simply beneath 50%.

Central Financial institution officers stated deposits affected by sanctions towards Russia have been “beneath 50 million euros.”

Nonetheless reeling from a 2013 financials disaster that put the nation on the verge of chapter, Cyprus has been at pains to rehabilitate its picture as a cash laundering haven the place Russian oligarchs might park their money.

The Cypriot authorities has stated the affect of Russia’s invasion of Ukraine might be restricted due to a raft of measures to cut back Cyprus’ publicity to the Russian financial system.

Banking officers who spoke on situation of anonymity stated that Russia-linked deposits in Cypriot banks quantity to between 4% and 6%.