Shares in Turkish state lender Halkbank surged 5% on Wednesday after the bank reached a settlement with US authorities over Iran sanctions violations. The Istanbul-listed lender, which holds about $100 billion in assets, avoided admitting criminal wrongdoing or paying fines under the agreement announced late Monday.

The settlement resolves a 2019 case accusing Halkbank of helping Iran evade economic sanctions and launder billions through the US financial system. European banks like BNP Paribas and UniCredit have paid billions in similar cases. The deal comes as Turkey, which helped broker the Gaza ceasefire, seeks to improve relations with Washington amid high inflation and economic challenges.

Analysts say the agreement could pave the way for Turkey to purchase F-35 stealth fighters after the deal was blocked in 2020 under CAATSA sanctions following Turkey's purchase of Russian S-400 air defense systems. The settlement requires Halkbank to work with a third party to review its sanctions and anti-money laundering compliance, potentially expanding its access to international markets.