Old Turk, German fellow and Middle Eastern state share a bank (7)
I believe the answer is:
ottoman
'old turk' is the definition.
(as in the Ottoman Empire)
'german fellow and middle eastern state share a bank' is the wordplay.
'german fellow' becomes 'otto' (common German name).
'and' says to put letters next to each other.
'middle eastern state share' becomes 'mn' (I can't justify this - if you can you should believe this answer much more).
'bank' indicates putting letters inside.
'mn' going around 'a' is 'man'.
'otto'+'man'='OTTOMAN'
(Other definitions for ottoman that I've seen before include "Turkish dynasty or long cushioned seat" , "Couch for a Turk" , "cushion" , "Armless, padded seat" , "Turkish (hist.)" .)