Shares of Turkey’s state-owned lender Halkbank fell sharply on Wednesday after a hearing in the United States over the bank’s criminal case was abruptly postponed, adding fresh uncertainty for investors, according to reports.
Halkbank stock dropped more than 5 percent, making it the worst-performing company on Istanbul’s BIST-100 index. The shares were trading about 5.7 percent lower by mid-morning, after falling as much as 7 percent earlier in the session.
The status conference, which had been set for Tuesday before a US district judge in New York, was expected to address how the case would proceed toward trial. The court docket showed the hearing was adjourned and that no new date had been announced.
Halkbank faces fraud, money laundering and conspiracy charges in the United States, accused of helping Iran evade sanctions tied to its nuclear program.
The bank was indicted in 2019, and two individuals, including a former senior executive, have already been convicted in connection with the scheme.
Halkbank has pleaded not guilty, arguing that it should be immune as a state-owned institution.
In October US Supreme Court rejected the bank’s latest appeal, allowing the case to proceed.
The postponement comes as relations between Turkey and the United States have shown signs of warming, driven partly by President Recep Tayyip Erdoğan’s personal rapport with US President Donald Trump.
Erdoğan raised the Halkbank case in a meeting with Trump at the White House last September, later expressing hope for a resolution.
According to a Reuters report in October, Turkish officials suggested a $100 million settlement to resolve the Halkbank case during Erdoğan’s visit to the White House.
The proposal, which included additional conditions, would have allowed Halkbank to avoid admitting guilt, a key demand for Ankara. It is not clear how US officials responded or whether discussions continued after the meeting between Erdoğan, Trump and senior aides at the White House on September 25.
Analysts said investors had been expecting more clarity as relations between the two countries appeared to be improving.
“The postponement increased uncertainty yet again, triggering a sharp downward move,” strategist Çağlar Toros of Info Yatırım told Bloomberg.
Erdoğan has long criticized the US case against Halkbank, calling the charges “unlawful” and “ugly.”
A settlement is expected to exceed $100 million. In past cases European banks have paid far larger penalties for sanctions violations. France’s BNP Paribas, for instance, agreed in 2014 to pay nearly $9 billion to resolve similar allegations.
The controversy has already led to convictions. Mehmet Hakan Atilla, a former Halkbank executive, served about three years in a US prison on sanctions-related charges. Turkish-Iranian gold trader Reza Zarrab, accused of orchestrating the scheme, negotiated a plea deal and testified against Atilla.
Halkbank shares had gained about 11 percent over the previous five days before the hearing was postponed.