UPDATE 1-Halkbank shares rise as US formally moves to drop Iran sanctions case

Adds overnight news, share movement and analyst note

- Halkbank HALKB.IS shares rose nearly 4% on Thursday after the U.S. Department of Justice formally asked a federal judge to dismiss its criminal case against the Turkish state-run lender.

Halkbank, which was charged by U.S. prosecutors in 2019 with helping Tehran evade U.S. economic sanctions, reached a deal with the U.S. government to end the prosecution, conditional on the bank complying with its terms over a 90-day period, which has now expired.

Halkbank on Thursday said the criminal case is set to conclude after the court granted the U.S. Justice Department's request for dismissal.

In a statement to the Public Disclosure Platform (KAP), Halkbank said it submitted a jointly signed letter for dismissal of the criminal case with the U.S. Attorney's Office for the Southern District of New York on Wednesday as required in a settlement agreement.

Halkbank shares have risen about 27.57% so far this year, while Turkey's main banking index has fallen around 2.19%.

With the conclusion of this case, a significant burden will be lifted from Halkbank, which will be able to more easily borrow abroad, brokerage Ata Yatirim said.

At the time of the deal, Halkbank said it would not admit to any criminal wrongdoing and would not pay any judicial or administrative fines.

Following the March agreement, the Turkish bank had hired Ernst & Young to review its compliance with U.S. sanctions and anti-money laundering policies, its lawyers said in a court filing.