Finance
Norway fund's ethics body reviews Israeli bank stakes over West Bank settler loans
Published by Global Banking & Finance Review®
Posted on June 3, 2025
4 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 3, 2025
4 min readLast updated: January 23, 2026
Norway's wealth fund reviews Israeli banks' roles in West Bank settlements, potentially leading to significant divestments.
By Gwladys Fouche, Stefania Spezzati and Steven Scheer
OSLO/LONDON/JERUSALEM (Reuters) -The ethics watchdog for Norway's $1.9 trillion wealth fund is scrutinising Israeli banks' practice of underwriting Israeli settlers' housebuilding commitments in the occupied West Bank in a review that could prompt up to $500 million in divestments.
The Council on Ethics, a public body set up by the Ministry of Finance, has, however, decided not to object to the Fund's investments in accommodation platforms such as Airbnb that offer rentals in the Jewish settlements.
The body checks that firms in the portfolio of the world's largest wealth fund meet ethical guidelines set by Norway's parliament.
In an interview with Reuters on May 22, Council head Svein Richard Brandtzaeg said it was examining how Israeli banks offer guarantees that protect Israeli settlers' money if the company building their home in the West Bank should fold.
Other practices are also being looked at "but this is what we can see so far", he said. "That is what is well documented." He declined to say how long the review would take.
Brandtzaeg did not name the banks but, at the end of 2024, the fund owned about 5 billion crowns ($500 million) in shares in the five largest Israeli lenders, up 62% in 12 months, according to the latest data.
The banks - Hapoalim, Bank Leumi, Israel Discount Bank, Mizrahi Tefahot Bank and First International Bank of Israel - did not answer requests for comment.
Since 2020, they have been included in a list of companies with ties to settlements in the occupied Palestinian territories compiled by a U.N. mission assessing the implications for Palestinian rights.
Latterly, investor concern has grown around the world over a 19-month-old Israeli onslaught that has killed more than 50,000 Palestinians and devastated the Gaza Strip in response to an attack by Hamas militants that killed more than 1,200 Israelis.
Around 700,000 Israeli settlers live among 2.7 million Palestinians in the West Bank and East Jerusalem.
Many settlements are adjacent to Palestinian areas and some Israeli firms serve both Israelis and Palestinians.
The United Nations' top court last year found that Israeli settlements built on territory seized in 1967 were illegal, a ruling that Israel called "fundamentally wrong", citing historical and biblical ties to the land.
ACCOMMODATION RENTALS IN WEST BANK SETTLEMENTS
In mid-2024, the Council on Ethics began a new review of investments linked to the West Bank and Gaza.
It examined 65 companies but recommended only petrol station chain Paz and telecoms company Bezeq for divestment, resulting in share sales.
The Council also scrutinised some multinationals to see if their activities in the West Bank met its guidelines.
Among them were the accommodation platforms, including Airbnb, Booking.com, TripAdvisor and Expedia, named on the U.N. list and accounting for about $3 billion in Fund investments.
But the Council will not recommend watchlisting or divesting from those, Eli Ane Lund, head of its secretariat, said in the joint interview.
"The company's activity must have some kind of influence on the (ethical) violations," she said. "It's not (enough) to have a connection, it has to have something to do with the violation, it must contribute to it."
The Council's recommendations go to the central bank, which is not obliged to follow them but generally does.
If investments are sold, it is done gradually to avoid alerting markets, and the decision is then made public.
Pro-Palestinian campaigners say the Council sets its bar too high for recommending divestments, and that the Norwegian government should instruct the fund to conduct a general divestment from Israel just as it did for Russia in 2022, three days after Moscow invaded Ukraine.
But most lawmakers support the Council's approach, and are set on Wednesday to formally endorse a parliamentary finance committee's decision not to order a wholesale boycott.
(Reporting by Gwladys Fouche in Oslo, Stefania Spezzati in London and Steven Scheer in Jerusalem; Editing by Kevin Liffey)
The Council on Ethics reviews investments of Norway's wealth fund to ensure they meet ethical guidelines set by parliament, particularly scrutinizing companies linked to Israeli settlements.
The review includes the five largest Israeli banks: Hapoalim, Bank Leumi, Israel Discount Bank, Mizrahi Tefahot Bank, and First International Bank of Israel.
While pro-Palestinian campaigners argue that the Council's criteria for divestment are too strict, most lawmakers support the Council's approach and have endorsed not conducting a wholesale boycott.
The Council recommended divestment from petrol station chain Paz and telecoms company Bezeq, after examining 65 companies linked to the West Bank and Gaza.
The Council assesses whether a company's activities have a direct influence on ethical violations, requiring more than just a connection to the issue at hand.
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