By Ercan Gurses and Ayla Jean Yackley
ANKARA/ISTANBUL (Reuters) - Turkey's deputy prime minister said on Tuesday that companies linked to a group blamed for a failed coup posed a risk of up to 5 billion lira ($1.70 billion) to Turkish banks but that the state seizure of such firms had minimized the risks.
The minister did not specify what those risks were, but such costs would represent only a small fraction of the nation's banking sector assets.
Turkey has taken control of a bank, several media firms and other enterprises as part of a crackdown on companies it suspects of links to sympathizers of Fethullah Gulen, the U.S.-based cleric the government blamed for July 15's failed putsch.
Boydak Holding, a conglomerate which features in the Fortune 500 list of top Turkish firms is among those added to the list of firms to be managed or sold by the state's Savings Deposit Insurance Fund (TMSF) after a court ordered its seizure.
Turkey has appointed administrators to a series of companies which it accuses of links to what prosecutors term the Gulenist Terrorist Organisation (FETO) since early last year as part of a battle with President Tayyip Erdogan's ally-turned-foe.
Gulen, who Turkey wants extradited from the United States, has denied involvement in the coup attempt.
"The appointment of the TMSF to companies related to FETO has removed the banking risks represented by these companies," Deputy Prime Minister Nurettin Canikli told a banking meeting on Tuesday.
He put the risk to Turkey's banking sector in a range from 4.2 billion lira ($1.4 billion) to 5 billion lira but did not specify how that figure was reached or provide comparison to overall banking sector balance sheets.
Total assets held by Turkish banks stood at $800 billion at the end of 2015, according to the Banks Association of Turkey (TBB).
In the case of Boydak, a TMSF spokesman told Reuters a court in the central city of Kayseri where the conglomerate is based had ordered TMSF to take control of the firm. State-run news agency Anadolu cited allegations it financially backed Gulen.
Boydak and Boydak family members own a total 22.34 percent stake in unlisted Islamic finance lender Turkiye Finans, in which Saudi Arabia's National Commercial Bank has a 67.03 percent state, according to the Borsa Istanbul website.
Canikli said he saw limited impact, saying Boydak's head until the seizure had already resigned from the Turkiye Finans board. "Talks are continuing on the main group taking over the Boydak shareholding," he said.
Mustafa Boydak, chairman until the seizure, wrote on Twitter that the firm would pursue its legal rights and denied wrongdoing. He is being investigated over the coup plot and was freed last month after being briefly detained.
President Tayyip Erdogan has vowed to choke off businesses linked to Gulen, describing his schools, firms and charities as "nests of terrorism".
Closely held Boydak, which has interests in textiles, home furnishings, chemicals, steel and logistics, had sales of 6.9 billion lira ($2.3 billion) last year. Fortune magazine said it ranked 487 on its list of Turkey's biggest companies in 2016.
Boydak was established in 1957 and was part of the so-called Anatolian tigers phenomenon: businesses that transformed Turkey's conservative and poor heartland during economic liberalization beginning in the 1980s.
The TMSF is primarily tasked with managing funds related to troubled banks and has occasionally taken over non-financial assets held by banks or their owners.
(Additional reporting by Nevzat Devranoglu and Orhan Coskun; Writing by Daren Butler; Editing by Edmund Blair and Catherine Evans)