The Royal Bank of Canada has closed dozens of accounts linked to the Panama Papers, becoming the first Canadian bank to publicly confirm it has severed ties with customers identified in the leak.

The admission came some 10 months after the names of all clients of Mossack Fonseca, the Panamanian law firm at the centre of the leak, were published online.

“We reviewed all accounts related to Mossack Fonseca in depth,” said J.F. Courville, chief operating officer of Royal Bank’s wealth management unit.

The bank later said it closed “about 40” customer accounts, without being more precise.

“The relationships with Mossack Fonseca — basically relationships initiated by the client using that law firm as an adviser — represented an extraordinarily small proportion of our total client base,” Courville said.

As recently as December, RBC refused to confirm it had closed any accounts linked to the Panama Papers. National Bank and Scotiabank say they conducted reviews, but found no links to the Panama Papers and didn’t close any accounts. TD, BMO and CIBC did not respond to questions about customers linked to the database.

RBC bore the brunt of the early public pressure last spring when the Panama Papers revealed the bank had registered at least 429 offshore companies with Mossack Fonseca.

At the time, CEO David McKay said he was concerned for the bank’s brand and reputation.

Shortly afterward, the federal government took RBC to court, demanding the bank turn over its client files to aid the Canada Revenue Agency in its investigation. RBC did not oppose the demand.

The CRA is now investigating 85 Canadians named in the leak, 60 of whom are being audited.

Last April, RBC began a detailed review of four decades of internal records to fully understand its ties to Mossack Fonseca. During this process, Courville said, the bank identified accounts that no longer fell within its risk tolerance levels, based on current industry principles and the bank’s own criteria.

“Due to the operation of your accounts, we feel that we cannot achieve the requisite level of comfort with you,” read a letter RBC sent to a client named in the Panama Papers database last November. “Therefore, after careful consideration, we must advise you that we are not in a position to continue our banking relationship.”

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The letter, which was viewed by the Star, gave the client 30 days to close his accounts and repay his loans, including a nearly million-dollar mortgage on his house. RBC sent similar letters to the client’s teenage children, informing them that the “risk profile” of their Leo accounts — RBC’s savings accounts for people under 19 — “has changed substantially” and that the bank was “not in a position to maintain the Account.”

“It was difficult. I had to cancel the trip to India with my teenage son to deal with it,” the client said.

The client, who works as a wealth manager, had very little contact with Mossack Fonseca, according to an analysis of the Panama Papers database conducted by the Star. He showed up in the leak because he incorporated a Panamanian company on behalf of a group of clients in order to manage an investment property in Panama.

The Star has agreed to not name the client because it could find no evidence he did anything wrong.

“None of this is fair,” said the client. “The bank is acting upon unreasonable pressure being put on it by the government and public opinion … It’s guilt by association.”

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RBC would not confirm the details of its decision to close the client’s account and those of his children.

“Our decision that an account is outside our risk parameters or does not meet our own standards does not mean that clients have engaged in inappropriate activity,” wrote RBC spokesperson Lisa Hutniak in an email.

With files from Star wire services

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