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Shares in Turkish state lender Halkbank rallied following a US agreement to resolve an Iran sanctions-busting case that could have exposed the bank to billions of dollars of fines, after Turkey helped arrange the Gaza ceasefire deal.
Shares in the Istanbul-listed lender, which said on Tuesday it would not admit to any criminal wrongdoing or pay any fines under the settlement, rose 5 per cent, extending a 10 per cent rally that followed the agreement’s announcement late on Monday.
European banks that have faced similar Iran sanction-busting cases, such as France’s BNP Paribas and Italy’s UniCredit, have had to pay fines and other US penalties totalling billions of dollars.
Resolution of the long-running 2019 case — which accused Halkbank of helping Iran to evade economic sanctions and launder billions of dollars through the US financial system — has major economic and political consequences for Turkey.
It also comes as the US seeks to curb support for Iran, with which it is engaged in an air war alongside Israel that threatens to suck in neighbouring Turkey. Turkey’s economy is also struggling with high inflation.
“Economically, Halkbank has avoided the sort of multibillion fine that several European banks paid as a result of similar actions. These could have collapsed Halkbank and . . . generated a potentially severe banking crisis in Turkey,” said Matt Bryza, a former White House official who played a central role in US relations with Turkey.
“Politically, this decision underscores the dramatic improvement in relations between Ankara and Washington since President Trump returned to office, as well as how deeply Presidents Trump and Erdoğan respect and like each other,” Bryza added.
Halkbank, one of Turkey’s top five banks, with about $100bn in assets, argued during the case that the charges were beyond the US court’s jurisdiction.
Analysts said the agreement could open the way to a permanent improvement in US-Turkey relations, including Turkey’s long-held desire to buy dozens of F-35 stealth fighter jets.
That deal was blocked in 2020 during Trump’s first term, under so-called CAATSA sanctions after President Recep Tayyip Erdoğan bought two Russian S-400 air defence batteries.
“For the US Congress to lift CAATSA sanctions, the prior condition is for Turkey to remove S-400s from her territory,” Atilla Yesilada, an Istanbul-based analyst at the consultancy GlobalSource Partners, said.
“Now [following the Halkbank settlement] Erdoğan is more likely to accept this solution,” Yesilada added, with the Russian systems possibly shipped to a third country, or disassembled and kept under Nato supervision.
Under the deal, which will be reviewed by a federal court in New York on Wednesday, Halkbank agreed to work with a third party to review its sanctions and anti-money laundering compliance.
Halkbank, which is 91.5 per cent owned by Turkey’s sovereign wealth fund, said court approval of the agreement would “completely end” the criminal case processes against it.
“This development is expected to positively impact our Bank’s financial structure thanks to the expansion of our Bank’s access to overseas resources, correspondent banking network and international markets,” it said.