Erdoğan Pushes for Halkbank Deal to Reset US–Turkey Ties

Ankara is signaling optimism over a possible settlement in the long-running Halkbank case in the United States, with expectations that the Turkish state-owned bank will face only a “manageable” monetary penalty rather than crippling sanctions. According to a report by Bloomberg, the potential deal has already boosted Halkbank’s shares and could pave the way for improved relations between Ankara and Washington.

Nearly a Decade of Legal Battles

The case dates back to 2019, when US prosecutors accused Halkbank of participating in a multi-billion-dollar scheme to evade sanctions against Iran. The charges include fraud, money laundering, and sanctions violations.

Halkbank argued that, as a state-owned bank, it should enjoy sovereign immunity from US courts. However, federal judges rejected this claim last year, escalating legal risks for the bank. Halkbank subsequently appealed to the US Supreme Court, but Bloomberg reports that Ankara now expects the matter to be resolved before the high court issues a final ruling.

A Path Toward Settlement

Sources told Bloomberg that Turkey anticipates a negotiated settlement in which the US Justice Department would drop the case if Halkbank agrees to pay a fine. In return, the bank could withdraw its appeal and close a chapter that has strained bilateral ties for years.

One insider described the talks as an effort to “open a new page in relations”, highlighting the political dimension of the negotiations.

Erdoğan–Trump Meeting Raises Hopes

President Recep Tayyip Erdoğan raised the Halkbank case directly with US President Donald Trump during their meeting at the White House last month, Bloomberg reported. The encounter has fueled speculation that political will on both sides could accelerate a resolution.

Following the meeting, Halkbank shares surged more than 11%, as investors began pricing in the likelihood of a deal that would lift one of the heaviest overhangs on the bank’s future.

Market and Diplomatic Implications

Halkbank’s ability to access international markets—especially Eurobond financing—has been severely restricted since the US case began. Analysts suggest that a settlement would not only ease the bank’s financial constraints but also improve Turkey’s broader standing with international investors.

Diplomatically, resolving one of the most contentious disputes in US–Turkey relations could also inject momentum into a partnership strained by defense, sanctions, and regional issues.

The Backstory: Zarrab and Atilla

The case is rooted in earlier prosecutions. Turkish-Iranian businessman Reza Zarrab, once at the center of the sanctions-evasion scheme, turned state witness in the US and provided testimony that implicated Halkbank officials. Mehmet Hakan Atilla, a former Halkbank executive, was convicted in the US and served nearly three years in prison before returning to Turkey.

For years, the case has been a flashpoint in Turkish domestic politics, with Ankara portraying it as a politically motivated assault on its sovereignty. Now, the possibility of a financial settlement rather than prolonged litigation could provide Erdoğan with a political win while reassuring investors.