Israeli banks under fire for soaring profits amid Gaza genocide
Israel’s largest banks are facing public outrage for posting record profits during a genocide in Gaza. Banks have come under sharp criticism over the financial windfalls as emblematic of a system profiting from war, occupation and mass killing. In response, the banks are now scrambling to deflect anger with modest “relief initiatives” that many see as little more than PR manoeuvres.
The controversy centres on Israel’s five largest banks — Bank Leumi, Bank Hapoalim, Mizrahi Tefahot, Israel Discount Bank and First International — which, according to the Financial Times, together amassed a net profit of NIS 29.5 billion (approximately $7.8 billion) last year. Both Leumi and Hapoalim reported all-time record earnings, even as Gaza was reduced to rubble and Israeli society grappled with economic stress amid the escalating genocide.
Bank Hapoalim is one of a number of Israeli banks placed on the boycott and divestment list of the world’s largest sovereign wealth fund, Norges Bank Investment Management. The fund’s executive board said it decided to divest from First International Bank of Israel and its holding company FIBI Holdings, Bank Leumi, Mizrahi Tefahot Bank, Bank Hapoalim and Caterpillar, over ethical concern.
Bank Leumi was placed on the UN blacklist along with Bank Hapoalim for doing business in illegally occupied Palestinian territories.
Much of the profit surge has been attributed to Israel’s elevated interest rates, which the Bank of Israel kept high at 4.5 per cent, fuelling net interest margins. These high margins widened the gap between what banks pay on deposits and what they earn from loans — disproportionately affecting households already hit by inflation and economic uncertainty.
As the death toll in Gaza mounts and criticism intensifies, the Bank of Israel has introduced a scheme forcing the lenders to offer NIS 3 billion ($790 million) in financial “relief” by 2027. Bank Hapoalim has offered customers a cash payment of NIS 100 ($26 USD) or two shares — a giveaway the bank hailed as a “historic” corporate gesture. Bank Leumi, meanwhile, has pledged to cut a key interest rate on mortgages and consumer loans by 0.25 percentage points starting in October.
In a related banking story, Rothschild & Co — one of Europe’s most prominent financial dynasties — has announced a major expansion of its Middle East wealth management business through a deal with Liechtenstein’s LLB. While framed as a commercial growth initiative, the development inevitably recalls the Rothschild family’s historical role in the Zionist colonisation of Palestine, where it financed early settlement and infrastructure projects that facilitated displacement and segregation.
The deal, which could see Rothschild absorb up to CHF 1 billion in assets ($1.12 billion USD), comes amid a rush by European elites to relocate wealth to the UAE, a tax haven that has also become a safe harbour for Israeli officials and Russian oligarchs.