|Total assets||TRY109 billion (2012)|
|Total equity||TRY11.5 billion (2012)|
Halk Bankası ("People's Bank"), or Halkbank, is a large Turkish state-owned bank.
Halkbank was incorporated in 1933 and began offering services 1938, it initially provided loan services via the People’s Funds. After 1950, Halkbank was authorized to directly open branches and grant loans to customers. By the beginning of 1964, Halkbank had embarked upon an ambitious program where it increased capital and became more active by establishing a nationwide network of branches.
Halkbank was a link in the chain to finance Iranian petroleum interests in the wake of U.S.-led nuclear sanctions. In March 2012 Iran was stopped from using the international money transfer system SWIFT. Halkbank seems, between March 2012 and July 2013 while the UN sanctions regime was in place prior to the November 2013 P5+1 agreement, to have purchased some $13bn worth of gold on the open market. The sanctions prevented Iran from being paid in dollars or euros, but gold was never mentioned in the sanctions regime, and therefore this loophole allowed gold to be used to fund the purchase of Iranian petroleum products. Halkbank allowed the middlemen of Iran to buy gold with their Turkish lira, and that gold found its way back to Iranian coffers. One investigation found that US$2bn in gold bullion (about 36 tonnes) was flown from Turkey to Dubai in August 2012 alone. In defending its decision not to enforce its own sanctions, the Obama administration insisted that Turkey only transferred gold to private Iranian citizens. The administration argued that, as a result, this wasn't an explicit violation of its executive order. Iranian Ambassador to Turkey Ali Reza Bikdeli recently praised Halkbank for its "smart management decisions in recent years [that] have played an important role in Iranian-Turkish relations." Halkbank stated that there were no sanctions against trading precious metals with Iran until 1 July 2013.
Halkbank also had Indian accounts that in 2013 traded with Iran: "India now owes Iran $5.3 billion in oil debt. India is planning to pay Iran $1 billion per month -- that is $12 billion annually -- also through Halkbank."
In December 2013 Halkbank's CEO Süleyman Aslan was arrested and charged with taking bribes from, amongst others, Reza Zarrab, an Iranian-Azeri businessman who had taken Turkish citizenship under the name Sarraf. Police reportedly discovered shoeboxes containing US$4.5 million in the home of Aslan. Scores of police officials have reportedly been dismissed because their investigations made politicians uncomfortable. The chain of police command was changed so that politicians would be informed of, and could frustrate, police activities. This caused an injunction to be heard in the court system, who blocked the change. A prosecutor was dismissed.
The arrest, which came along with many other arrests of officials allied with then-Prime Minister Recep Tayyip Erdoğan (now President of Turkey), is seen as part of a power struggle between the prime minister and U.S.-based Turkish religious leader Fethullah Gülen, who inspires Hizmet, an Islamic civil movement. "Those who don't see the thief but go after those who chase the thief - may Allah bring fire to their homes," said Gülen.
Oya Özarslan, of the corruption watchdog Transparency International, is worried: "[R]ecent changes in the police forces and public prosecutors breaking out this scandal as well as the changes in the regulation of the police forces leave a number of question marks."
In March 2017, deputy head of the bank Mehmet Hakan Atilla was arrested by the U.S. government for conspiring to evade sanctions against Iran by helping Zarrab "use U.S. financial institutions to engage in prohibited financial transactions that illegally funneled millions of dollars to Iran". Zarrab was arrested in Miami, Florida, in March 2016. In Ankara in March 2017, U.S. Secretary of State Rex Tillerson said there was no link between the Turkish request for extradition of Gülen and the arrest of Atilla and that both cases would proceed in conformity with the law. Atilla's trial commenced in New York City federal court in November 2017, with Zarrab agreeing to testify after making a plea agreement with prosecutors. According to the New York Times, the prosecution of Atilla and others has "sent tremors" through Turkish political circles. Erdogan has sought, unsuccessfully, to persuade American officials to drop the case, and the state media has been downplaying coverage of the trial.
In early 2018, Atilla was convicted on five of six counts against him, including bank fraud and conspiracies and acquitted on one count after four days of jury deliberation. Zarrab was the prime prosecution witness in the seven days of trial testimony. Atilla's sentencing is scheduled for April 2018 and the bank fraud count alone carries a maximum sentence of 30 years in prison. Seven other co-defendants are still at large.