More European Pension Funds May Join Boycott


Three major European pension funds are considering selling their holdings in Israel’s banks, the Financial Times reported on Monday.

PGGM, another leading pension fund, announced two weeks ago that it would divest from its holdings in Israeli banks.

“As well as the Dutch pension fund ABP, the world’s third-largest, with €300 billion of assets under management, the investors include Nordea Investment Management, a €130 billion Scandinavian fund house, and DNB Asset Management, a €60 billion Norwegian fund group All three want more information from the Israeli banks about their involvement in financing the [Jewish communities over the Green Line], which [they say] contravene international human rights laws established under the Fourth Geneva Convention in 2004,” the British newspaper said.

It was not news to the banks, since negotiations have been ongoing for about a year. But they were not prepared for newspaper headlines.

“Sources at these pension funds told us that they will divest from Israeli quietly, but that has not happened in practice. This is not the way to behave,” said one bank official.

A year ago, the banks invited representatives of some of the pension funds and other investment institutions to visit Israel. Banking sources say that all agreed the situation was complicated and that it was hard to judge the banks’ conduct.

At stake is more image than money. “Even if these institutions sell their shares, we’re not talking about financial damage. We’re talking about holdings worth millions of dollars. That said, the damage from these reports is mostly to the image and there is concern that this could snowball with more institutions jumping on the bandwagon,” one source told Globes.

The banks have tried to persuade the investment institutions that they cannot discriminate among customers, and that they must provide banking services on the basis of business, not political, considerations. Some financial institutions were not swayed by the arguments and may opt for divestment.