Officials suspect French megabank BNP Parisbas pulled out of Israel due to boycott pressure

Israeli officials suspect that France-based megabank BNP Parisbas has pulled out of Israel due to pressure from Palestine solidarity groups, even though the bank itself has denied this.

Haaretz reported on 24 November:

The powers that be are furious at BNP Paribas for shuttering its operations in Israel, and suspect it is acting due to Arab and anti-Israeli pressure in France, the bank’s home base.

Bank of Israel Governor Stanley Fischer, Finance Minister Yuval Steinitz, Banks Supervisor David Zaken and their top officials believe the bank’s board of directors caved to pressure groups, contrary to its claims.

This is the first case in years of a foreign bank leaving Israel. BNP Paribas has had operations in Israel since 2003. Most of its business here involved financing large projects that involve French companies.

Israeli business news website Globes had previously reported on 15 November that the closure of the BNP Parisbas Israeli branch – leading to some 50 layoffs – was for business reasons:

Banking sources believe that BNP is closing the branch because of its inability to gain a substantial standing in the business credit to large companies market. This market is dominated by Citigroup Inc. (NYSE: C), HSBC Holding plc (LSE: HSBA; HKSE: 005; NYSE, Paris: HBC), and Deutsche Bank AG (DAX: DBK; NYSE: DB), which operates a representative office in Israel. BNP Israel tried to focus on credit for infrastructures, water, energy, transportation, and renewable energy, but was unable to consolidate a strong position in the market.

While the reports about what exactly motivated BNP Parisbas’s decision are inconclusive, the fact that Israeli officials suspect it was as a result of civil society pressure over Israel’s human rights abuses is itself significant.

French firms, especially Veolia, have been under immense pressure – often successful – by boycott, divestment and sanctions (BDS) activists for their role in profiting from Israeli occupation and other illegal practices. But BDS efforts do not appear to have specifically targeted BNP Parisbas.

Banking sanctions could “cripple” Israel

If banks were to begin responding to BDS campaigns by curtailing services in Israel, it could be a significant escalation. In an article for The Electronic Intifada last year, Terry Crawford-Browne argued that banking sanctions against apartheid South Africa in the 1980s were key to bringing down that regime. Crawford-Browne, himself a former banker, was one of the activists behind the South Africa banking sanctions campaign.

It’s no wonder then that despite bravado from Israel propaganda groups that BDS is ineffective, Israel’s officials appear desperately worried that BDS is at work even when it is denied by the party involved.