* Bank, 75% state-owned, reflects govt stance on sanctions
* Handles payments by refiner Tupras to Iran, sources say
* Turkey to seek waiver from U.S. for Tupras
By Simon Cameron-Moore
ISTANBUL, Jan 4 Turkish lender Halkbank
, little known outside Turkey, has gained a reputation
in the oil market over the past 18 months for handling
transactions that other banks fear to touch - trade deals with
Now a new law signed by President Barack Obama last
Saturday, which imposes U.S. sanctions on financial institutions
dealing with Iran's central bank, has put the bank squarely in
Halkbank's stance toward Iran largely has reflected the
attitude of the Turkish government, which owns 75 percent of the
bank, towards international sanctions against Tehran over its
Heavily dependent on imports of oil and gas from its
neighbour, Muslim NATO member Turkey opposed the imposition of
U.N. sanctions on the Islamic Republic in 2010 but says it is
abiding by those measures.
Officials have repeatedly said, however, that there is no
obligation for Turkey to enforce tougher unilateral sanctions
subsequently announced by the United States and European Union.
U.S. Treasury officials have visited Turkey several times
since to advise banks that doing business with proscribed
Iranian entities runs the risk of being frozen out of the U.S.
That appeared to hold little threat for Halkbank given its
profile as a state-controlled bank with few direct links to the
United States. But the new U.S. law could turn up the pressure.
The sanctions, according to a senior U.S. official, would
target private and government-controlled banks -- including
central banks -- and would take hold after a warning period of
two to six months, depending on the transaction.
Obama could grant waivers to institutions in countries that
significantly reduce dealings with Iran.
On Wednesday an Energy Ministry official confirmed Turkey
would seek such a waiver for its sole oil refiner, Tupras, a
major customer for Iranian oil.
Halkbank handles payments to Iran by Tupras, which is owned
by the Turkey's largest conglomerate Koc Holding,
according to industry sources with knowledge of the
Indian refiners, unable to pay Iran for imported oil through
their own banking system for fear of U.S. retribution, turned to
Halkbank in mid-2011 to make payments.
In December, Halkbank refused to open an account for an
additional Indian refiner, BPCL, for that purpose. No
reason was given, though there was speculation that Turkey
wanted to avoid further antagonising Washington.
Halkbank was contacted over the status of the bank's
dealings with Iran, but senior officials were unavailable for
Halkbank has limited operations overseas.
Its website lists a branch in Bahrain and four in northern
Cyprus, which cater for Turkish Cypriots living in a breakaway
state recognised only by Turkey.
It also has a representative office in Tehran that it
inherited in 2004 when it took over Pamukbank, once a jewel of
Turkish tycoon Mehmet Emin Karamehmet's business empire.
Customers cannot open accounts there, but the Tehran office
does help handle interbank deals and issues with Iranian banks.
According to a banking source in Tehran, the Halkbank office
used to also help others including European banks make payments
to Iran, but those activities ended after the EU and U.S.
sanctions were imposed.
"Business has become much tougher these days," the source
Now, according to that source, the Tehran office deals only
with trade and payments between Turkey and Iran, and checks are
made to ensure that it does not violate U.N. sanctions.
Most of Halkbank's business involves lending to domestic
companies as Turkey's economy boomed over the past decade.
"The bank is working with chamber unions and local
cooperatives. It's a different model compared to other Turkish
banks, a much more defensive structure," according to an
Istanbul-based banking analyst, who requested anonymity while
speaking about a state-controlled bank.
"During the global crisis in 2008-2009, non-performing loans
of Halkbank were much lower compared to peers."
Halkbank has grown to become the country's sixth-largest
bank based on unconsolidated assets and held a domestic market
share of nearly 8 percent by end-September, according to Fitch