Under the terms of the potential acquisition, PCF shareholders are expected to retain a small minority position in the combined group.
PCF Bank offers a range of savings products for retail customers and finance products for individuals and businesses.
PCF confirmed the talks in its annual results and noted that the announcement was made without the approval of Castle Trust.
As a consequence of this announcement, an 'offer period' has now commenced and Castle must announce a firm intention to make an offer for PCF by the 28th June 2022.
A spokesperson from Castle Trust Bank said: "Castle Trust Bank is a leading UK fintech bank that regularly reviews a range of opportunities as it grows. We are not commenting on the announcement at this time."
