ISTANBUL- Turkey's Denizbank DENIZ.IS said on Thursday it did not have any dealings with the shipping group owned by gold trader Reza Zarrab, who has pleaded guilty and is testifying in a U.S. federal court that he helped Iran get around U.S. sanctions. Zarrab on Wednesday told the court that he helped Iran use funds deposited in Turkey's state-owned Halkbank HALKB.IS to buy gold, which was smuggled to Dubai and sold for cash. Halkbank has said all of its transactions complied with national and international regulations.

Zarrab also testified that he used Denizbank for some transactions, allegations which the lender disputed.

"Our transactions only revolved around buying and selling gold domestically, and there were no foreign transactions," Denizbank said in a statement. "Our bank... has had no dealings with the Royal Shipping group owned by Reza Zarrab."

The case has fueled tensions between the United States and Turkey, which are NATO allies. Turkish President Tayyip Erdogan's government has said the case was fabricated for political reasons.

Turkey's banking regulator last month denied a local media report that six Turkish lenders could face substantial fines from the United States over alleged violations of Iran sanctions.

(Reporting by Ali Kucukgocmen; Editing by David Dolan) ((; +90 212 350 7046; Reuters Messaging: