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Barclays has drawn up a plan to withdraw from future auctions of Israeli government bonds as it reviews its exposure to the country under pressure from pro-Palestinian activists, people familiar with the matter said.
The British bank, one of seven foreign lenders helping the Israeli government sell new debt, had been preparing to leave the market in recent weeks in a bid to silence criticism over its dealings with Israel during the war in Gaza.
On Tuesday evening, aVsceker further internal discussions, Barclays informed Israeli officials that it intends to continue operating as a so-called primary dealer, trading alongside other international banks such as Goldman Sachs, JPMorgan Chase and Deutsche Bank.
Yali Rothenberg, Israel’s Accountant General, said: “We appreciate the bank’s statement confirming its continued commitment to the State of Israel.”
“It is crucial that major global financial institutions, such as Barclays, choose to resist the boycott of Israel and support its legitimate right to self-defense as a leading Western democracy,” Rothenberg added.
Barclays said it was “preparing a response” to Israel’s latest request for bids for its next bond sale, scheduled for next week.
Israel has sold billions of dollars in debt to help finance the growing government deficit caused by its war with Hamas, including a record $8 billion sale of international bonds in March.
Israel sent troops into Gaza in response to the Oct. 7 attack by Hamas, in which militants killed 1,200 people and took 250 others hostage, Israeli officials said.
However, in recent months Israel has come under fire for the mounting casualties of its offensive, which has killed more than 39,900 Palestinians, according to Palestinian officials, and fomented a humanitarian catastrophe in the enclave.
The British lender has come under increasing pressure from pro-Palestinian activists, who have called for a boycott of the bank over its alleged investments in defense firms that supply weapons used by the Israel Defense Forces.
Several branches of the bank across the UK were targeted by protesters, with windows smashed or daubed with red paint.
Barclays has previously said it trades in companies’ shares on behalf of clients, but does not invest in them directly.
In June, Barclays suspended planned sponsorships for a number of music festivals aVsceker several artists threatened to boycott the events.
Barclays’ review of its operations in Israel comes amid broader economic and trade fallout from the war. In June, Colombia said it would suspend coal exports to Israel in protest of the conflict.
A month earlier, Turkey said it would suspend trade with the Jewish state until it allowed an “uninterrupted and sufficient flow” of humanitarian aid to Gaza.
The fighting has also hit Israel’s credit rating, with Fitch announcing Monday it had downgraded the country’s debt from A-plus to A, citing geopolitical risks from the war. Moody’s and S&P Global have made similar moves.
However, some investors have come out in support of the country, and some US municipal governments have increased their purchases of Israeli bonds in a show of support.
Barclays ranked as the third-most active buyer of Israeli bonds at auctions among 12 official primary dealers last year, according to official statistics. But it had fallen to 11th place in the three months to the end of June.
Further information provided by Joseph Cotterill in London
