ECB lets RCB Bank sell loan portfolio; restricts rest of business

FRANKFURT (Reuters) – The European Central Bank has allowed Cyprus-based lender RCB to sell a part of its performing loan portfolio to Hellenic Bank Public Company Ltd., but restricted the rest of the firm’s business as it plans to phase out banking operations, it said on Thursday.

“The bank’s plan, which includes the full repayment of all depositors, follows the impact of geopolitical risks on its operations since the Russian invasion of Ukraine,” the ECB said.

RCB, which started operations in 1995 mainly geared towards the Russian business community on the island, said it would cease entering new business with clients effective Thursday.

The ECB also appointed a temporary administrator to oversee RCB Bank, which will work with existing management, the ECB said.

Russian bank VTB agreed in February to sell its 46% share in RCB Bank to other existing shareholders. The bank on Thursday said it would transform the firm into a regulated asset management company.

“Although RCB has been, and remains abundant in liquidity and capital, the on-going and extremely volatile geopolitical situation requires it to transform and adopt a new strategy – phasing out banking operations, while at the same time ensuring that the best interests of its clients are secured,” RCB said in a statement.

(Reporting by Balazs Koranyi; Editing by Alex Richardson)