V-MIL Domain Audit: HSBC Holdings plc

Audit Target: HSBC Holdings plc Audit Phase: V-MIL (Verification – Military, Infrastructure, Logistics) Date of Research Memo: June 2026

Direct Defence Contracting & Procurement

No public evidence was identified of direct contracts, tender awards, or memoranda of understanding between HSBC and the Israeli Ministry of Defence (IMOD), Israel Defence Forces (IDF), Israel Prison Service, or Israel Border Police. HSBC operates a commercial banking branch in Ramat Gan, Israel (since 2001) serving corporate clients, but no direct defence procurement contracts with Israeli state security bodies were documented in available sources. ¹² The bank’s Israeli operations appear focused on commercial corporate banking services rather than direct defence procurement facilitation.

Dual-Use Products & Tactical Variants

HSBC maintains a significant investment in Caterpillar Inc., estimated at approximately £99 million (roughly $127 million) in Caterpillar shares. ³ Caterpillar’s D9 bulldozers are documented in widespread use for Palestinian home demolitions in the West Bank and Gaza Strip. ⁴ Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund, divested $2.1 billion in Caterpillar shares, with the Council on Ethics stating “no doubt that Caterpillar’s products are being used to commit extensive and systematic violations of international humanitarian law.” ⁴ This investment in Caterpillar, a company whose equipment is documented in documented demolition operations in occupied territories, represents a material financial relationship with a firm whose products have documented dual-use applications in the context of the occupation.

Heavy Machinery, Construction & Infrastructure

HSBC participated in €1 billion in financing for the Tel Aviv Purple Line light rail project, involving Shapir Engineering and Industry Ltd. ⁵ Shapir operates the Jerusalem Light Rail Red Line, which serves illegal settlements including Pisgat Zeev and Neve Yaakov in East Jerusalem. ⁶ The DBIO V Report (November 2025) documented that European financial institutions provided $310 billion to 104 companies complicit in Israel’s occupation economy between January 2023 and August 2025, with HSBC listed among major creditors. ⁷ The DBIO IV Report (November 2024) identified HSBC as providing $14.21 billion in loans and underwriting to settlement-linked companies between 2020 and 2023, ranking HSBC fourth among European financial institutions for such financing. ⁸ Shikun & Binui Group, another construction entity linked to HSBC financing, builds housing units in West Bank settlements such as Modi’in Illit, Ariel, and Har Homa, and has constructed sections of the Gaza separation barrier. ⁹ These financing activities connect HSBC to infrastructure projects that directly serve or benefit from settlements in internationally recognized occupied territories.

Supply Chain Integration with Defence Primes

HSBC maintained holdings in Elbit Systems, Israel’s largest defence electronics company. The bank initially divested from Elbit Systems in December 2018 following sustained BDS (Boycott, Divestment, Sanctions) campaign pressure. ¹⁰ By November 2025, HSBC had re-acquired 16,317 shares in Elbit Systems, valued at approximately $8.3 million. ¹¹ Following continued civil society pressure through the “People Against Genocide” campaign, which targeted 11 HSBC UK branches in December 2025, HSBC reduced holdings to 651 shares (valued at $375,249) by March 2026 and achieved full divestment by May 2026. ¹²¹¹ Total HSBC defence sector investment is documented at approximately £831 million (over $1 billion) invested in defence firms supplying Israel. ⁵¹³ Elbit Systems specializes in unmanned aerial vehicles (UAVs) including the Hermes 450 and Hermes 900 models, which are deployed by the IDF, as well as tactical UAS systems and land-based military electronics. ¹¹ No public evidence was identified of HSBC serving as a primary lender in Caterpillar’s $3.5 billion syndicated revolving credit facility; available SEC filings list lead arrangers as Citibank, BofA, JPMorgan, Barclays, MUFG, and Société Générale, with HSBC participation unconfirmed. ¹⁴

Logistical Sustainment & Base Services

HSBC provides correspondent banking services to Israeli banks including Bank Hapoalim and Bank Leumi. ⁵ These banks have documented involvement in financing the settlement economy, though HSBC’s specific transactional role in facilitating defence-related logistics or base services is not detailed in available sources. The correspondent banking relationships represent a form of financial infrastructure support to Israeli financial institutions that, in turn, engage with entities operating in occupied territories.

Munitions, Weapons Systems & Strategic Platforms

HSBC provides financing to companies within the F-35 supply chain, including BAE Systems (which manufactures approximately 15% of each F-35 airframe) and Lockheed Martin (the prime F-35 contractor). ¹⁵ Israel operates F-35I “Adir” jets as part of its strategic air capabilities, and the country approved a $119 billion F-35/F-15IA expansion programme in May 2025. ¹⁵ Raytheon (RTX) maintains a joint venture with Rafael for Iron Dome Tamir missile production, and HSBC maintains financial relationships with Raytheon through its general corporate financing activities. ¹⁶ The bank’s historical and recent equity holdings in Elbit Systems, prior to the 2026 divestment, provided capital to a company whose Hermes 450 and Hermes 900 drones and tactical UAS platforms are deployed by the IDF. ¹¹ These financial relationships connect HSBC to the supply chains of major weapons systems operated by Israeli defence forces.

Export Licensing, Regulatory & Legal History

No public evidence was identified in US, UK, or EU export licence registries of specific export licence decisions granting, denying, or revoking licences for HSBC-related transactions to Israeli military end-users. ¹⁴ No public evidence was identified of regulatory enforcement actions, judicial reviews, or legal challenges specifically targeting HSBC for defence supply relationships with Israel. HSBC’s Defence Equipment Policy Statement (June 2024) prohibits financing for cluster munitions, white phosphorus, nuclear weapons, and lethal autonomous weapons, with the policy applying proportionately based on a client’s “business mix, organisational structure and governance.” ¹⁷ While the policy does not contain an explicit revenue threshold for exclusion, it provides interpretive flexibility for mixed-use defence contractors.

Civil Society Scrutiny & Documented Investigations

HSBC has been subject to sustained civil society scrutiny regarding its Israeli defence sector investments. In 2018, following a campaign that generated over 24,000 emails and 40 branch pickets, HSBC divested from Elbit Systems. ¹⁰ The “People Against Genocide” campaign targeted 11 HSBC UK branches in December 2025, leading to the bank’s full divestment of Elbit shares by May 2026. ¹²¹¹ War on Want’s “Deadly Investments” report (2024) identified HSBC among European banks providing substantial financial support to companies arming Israel. ¹³ The DBIO Coalition reports (2023, 2024, 2025) consistently identified HSBC among the top European creditors to settlement-linked companies, with $14.21 billion in financing documented between 2020 and 2023. ⁷⁸ HSBC’s Elbit re-investment (16,317 shares by November 2025) occurred after the July 2024 ICJ Advisory Opinion on the occupied Palestinian territory and the November 2024 ICC arrest warrants, raising questions regarding constructive notice. ¹²¹¹ The Caterpillar investment continues despite documented usage in occupied territories post-July 2024, and despite Norway’s sovereign wealth fund divestment and documented civil society calls for financial disengagement. ⁴ These campaigns and reports demonstrate sustained attention from civil society organisations on HSBC’s financial relationships with the Israeli defence sector.

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