January 12, 2018 / 6:40 AM / 5 days ago

Halkbank not Turkey will pay any U.S. fine, deputy PM says

ISTANBUL (Reuters) - Any fine levied against Halkbank by the United States will be paid by the bank itself and not the Turkish government, the country’s Deputy Prime Minister Mehmet Simsek was quoted as saying on Friday.

A U.S. jury last week convicted a Halkbank executive of bank fraud and conspiracy to violate U.S. sanctions against Iran in a sanctions-busting case that Turkey has said is a political attempt to undermine its economy.

Halkbank, which is majority state owned, has denied wrongdoing and has said all of its transactions were in line with local and international regulations.

“If Halkbank receives a fine, Halkbank will pay this. We will not borrow for Halkbank,” Simsek, who is responsible for the Turkish Treasury, told the Hurriyet newspaper.

He said the Treasury’s strong cash position was not related to Halkbank, comments likely aimed at easing investor concern about the impact of the case on state finances.

Turkey has said it will take any “necessary measures” to protect banks from any impact of the case.

The case has strained already fragile ties between the NATO allies. Ankara has said the U.S. judiciary relied on fabricated evidence and cast the case as a plot to undermine Turkey.

Simsek said the government’s “necessary measures” referred to liquidity support for elements of the financial system against the possible outcomes of the case, Hurriyet reported.

Reporting by Orhan Coskun; Writing by Ezgi Erkoyun and Daren Butler; Editing by David Dolan and Alexander Smith

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