Bank faced pressure from pro-Palestinian activists over its dealings with firm, which makes drones and weapons systems.

Banking giant HSBC has pulled out its investments in Israeli arms firm Elbit Systems after a campaign by pro-Palestinian activists, according to sources.

Sources within HSBC confirmed the move to Al Jazeera on Thursday, but the bank has not issued an official statement on the decision.

The company says it does not take positions on political issues but “observes international human rights principles” that apply to businesses.

According to a 2017 report by activist group War on Want, HSBC had 3.1m British pounds ($3.92m) invested in Elbit Systems.

The activist group, which says it is committed to rooting out the causes of poverty and human rights abuse, said HSBC had a total of 831.5m British pounds ($1.05bn) invested in companies that provided equipment to the Israeli military.

Several of the companies listed, such as Rolls Royce and BAE Systems, had a large civilian customer base, too.

Based in the city of Haifa, Elbit produces military and civilian-use equipment, including drones, aircraft, weapon control systems and artillery.

The company’s customers include the Israeli army, the US Air Force, and the British Royal Air Force.

Elbit also provides the US Customs and Border Protection agency with surveillance equipment for use along the US-Mexico border.

‘Positive first step’

War on Want said more than 24,000 people emailed HSBC with concerns over its investment in Elbit and activists picketed retail branches of the bank in the UK.

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Ryvka Barnard, a senior campaigner with War on Want, said the bank had taken “a positive first step” but added that it needed to act further.

“Doing business with companies like Elbit means profiting from violence and human rights violation, which is both immoral and a contravention of international law, ” Barnard said.

“HSBC continues to do business with over a dozen companies selling military equipment and technology used in human rights violation, including Caterpillar, whose bulldozers are used in demolition of Palestinian homes and properties, and BAE Systems, whose weapons are used in war crimes by Israel, Saudi Arabia, and other repressive regimes.”

BDS movement

The BDS (boycott, divestment, sanctions) movement started in 2005, after a call issued by Palestinian civil society groups for “people of conscience” around the world to help end Israel’s abuses against Palestinians, by cutting off cultural, academic and economic ties with the state.

With the advent of social media in recent years, the movement has gained traction and popularity among supporters of the Palestinian cause.

Its successes have been enough to earn the ire of senior Israeli officials, including Prime Minister Benjamin Netanyahu, who has sought to ban organisations that promote BDS in Israel.