Deutsche Bank AG DB is breaking ties with Cyprus-based RCB Bank whose name appeared in the spurt of leaked documents by the “Panama Papers” for allegedly granting huge amount of unsecured loans to close associates of the Russian President, Vladimir Putin.However, the German banking giant’s decision is not related to RCB Bank’s connection in the Panama Papers fiasco. The news, first reported by Bloomberg stated that RCB Bank was informed by Deutsche Bank about the latter’s decision to sever ties on Mar 21, prior to the Panama Papers affairs. Citing unidentified sources, the report also mentioned that the leak has prompted Deutsche Bank to expedite its exit process. Reportedly, both the companies are still continuing their correspondent banking relationship during a transition period.In an emailed statement to Reuters, RCB Bank in which Russian state-backed VTB Bank has 46.29% stake, said that it, “categorically denies any connection between the Panama Papers affair and the choice of Deutsche Bank to disengage from its clearing business in some regions.” Notably, RCB has claimed that the allegations in the leaked documents were false. It noted, “RCB Bank, as a principal, did not and does not provide unsecured loans. The Bank always acts in a transparent manner and all information about its activities is available to the relevant Cypriot and European authorities. RCB Bank, in accordance with applicable legislation of the Republic of Cyprus never discloses to third parties, including but not limited to media, any information regarding its clients, their operations and transactions.”Lenders globally resort to correspondent banking relationships to settle foreign exchange and trade transactions. Per the website of RCB Bank, Deutsche Bank is featured among its correspondent account partners for U.S. dollars and euro transactions. Among others, RCB Bank has relationships with Citigroup Inc. C, Barclays PLC BCS and Credit Suisse Group AG CS for transactions in U.S. dollars, British pounds and Swiss francs, respectively.Deutsche Bank’s move seems to be in line with its strategy to cut off ties with non-core clients and trim its products and service offerings, as part of the company’s broader overhauling to reduce cost and minimize risk. Notably, the bank’s new Co-Chief Executive Officer, John Cryan noted in a Jan 28 memo that the company has commenced the “process of off-boarding selected clients in areas of higher risk” as he looks to simplify the bank and improve its controls.Deutsche Bank currently carries a Zacks Rank #5 (Strong Sell).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CITIGROUP INC (C): Free Stock Analysis Report CREDIT SUISSE (CS): Free Stock Analysis Report BARCLAY PLC-ADR (BCS): Free Stock Analysis Report DEUTSCHE BK AG (DB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research