RCB Bank on Thursday announced that it will be gradually suspending its banking operations in a shift towards becoming a regulated asset management company.
The bank cited the ongoing and extremely volatile geopolitical situation as the key reason for its transformation and adoption of a new business model, despite its ample liquidity and capital, saying that this helps to ensure the best interests of its clients.
After the bank completes its shift away from accepting deposits and granting loans, it plans to transform into a regulated asset management company, given the substantial assets on its balance sheet, the bank said, adding that during this transformation process, RCB Bank will continue to service its existing clients and process all requests for payments or deposit transfers to accounts with other banks, meeting any current obligations.
The bank said that following an agreement with the ECB Banking Supervision on Thursday, it will stop entering into new business agreements with clients with respect to both deposits, loans or a combination of the two, while the bank will adhere to a specific timeline and process for the winding down of existing client relationships.
The bank said that all obligations to its existing clients will be paid in full.
In addition, RCB Bank also agreed with the ECB Banking Supervision to appoint a special auditing firm who, in conjunction with the RCBs management, will control and oversee the process of the bank completing its settlements with depositors in order to ensure the smooth resolution of all deposit relationships.
The auditing company selected for this process is Deloitte.
The banks current board of directors and management will continue to perform their current roles and duties as customers begin to receive their funds and the bank implements its new strategy.
It must be underlined that in accordance with RCB’s core values of trust, responsibility and excellence, the Bank will proceed with the full repayment of all its obligations towards its clients and continue focused on the management of the remaining assets, the bank said in a statement, referencing the recently announced loan portfolio sale to Hellenic Bank worth an estimated €556 million.
This action together with the existing high levels of liquidity enables RCB to fully meet its obligations to its clients and retain sufficient liquid assets for further operations after its transformation into an asset management company, the bank added.
RCB said that its clients will be notified and asked to transfer their operations and deposits to other banks in the following months, with clients being serviced as usual while this process is completed.
Payments and transfers will be continued to be executed by the bank in order to facilitate the aforementioned move to other banks.
Moreover, the bank said it will make payments, with the same date value, and repay deposits according to their contractual maturity or standard notice period.
The bank will imminently send letters of notice to clients for account closures, while it will also negotiate with customers whose fixed deposits have a maturity beyond June 2022, regarding the terms of early repayment with payment of the full amount of the deposit and interest for the period during which the amount was held by the Bank.
Upon full repayment of all demands and fixed deposits, RCB is planning to transform into an asset management company, which will continue to manage its substantial loan portfolio and specialize in the provision of other services, the bank stated.
RCB would like to wholeheartedly thank its clients for the long and mutually beneficial cooperation and regrets that due to the new geopolitical situation, it has decided, for Cyprus’ best interests, to take such measures when all its financial indexes were certainly among the best in the country, the bank concluded.
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