Settlements Prompt European Investors to Rethink Ties With Israeli Banks

Three major European pension funds are reviewing their holdings in Israeli banks due to concerns they finance West Bank settlements, the Financial Times reported Sunday.

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According to the report, ABP, a Dutch pension fund considered the world's third largest, Nordea Investment Management, a Scandinavian firm, and DNB Asset Management, a Norwegian company, want more information about the Israeli banks' involvement in Israeli settlements.

The three European firms combined manage nearly 500 billion euros' worth of assets.

The review by the three pension funds comes about two weeks after PGGM, the largest Dutch pension fund, divested from Israel’s five largest banks because they have branches in the West Bank and/or are involved in financing construction in the settlements.

PGGM dumped its holdings in Bank Hapoalim, Bank Leumi, First International Bank of Israel, Israel Discount Bank and Mizrahi Tefahot, saying in a statement, “…given the day-to-day reality and domestic legal framework they operate in, the banks have limited to no possibilities to end their involvement in the financing of settlements in the occupied Palestinian territories.

“Therefore it was concluded that engagement as a tool to bring about change will not be effective in this case.”

PGGM noted that the settlements are considered illegal under international humanitarian law, and added that "international observers have indicated that the settlements constitute an important obstacle to a peaceful [two-state] solution of the Israeli-Palestinian conflict."

ABP has held talks about the settlement issue with three Israeli banks for more than a year, while Nordea sent letters to Leumi and Mizrahi Tefahot expressing their concerns, according to the Financial Times. Nordea plans to meet with the banks in March before deciding in May whether to divest.

Discount Bank declined the Financial Times' request to comment, and Hapoalim and Leumi did not respond to requests for comment from the paper.