ActionAid looks to change banks after HSBC cluster bomb shame

Finance | Gareth Jones | 4 Nov 2009

ActionAid International is planning to withdraw its business from HSBC because of the bank’s record of working with a company that manufactures cluster bombs and other banned munitions.

A report by the Dutch peace movement IKV Pax Christi released last week revealed that HSBC has provided a loan facility and underwritten share and bond issues for the US-based cluster munitions producer Textron, earning it a place in the report’s ‘hall of shame’.

Manufacture of cluster munitions (pictured) is illegal in the UK, but earning money by advising companies who manufacture them elsewhere is not.

In an email to members of the CFDG’s Overseas Special Interest Group, ActionAid International’s head of finance Richard Callaghan said: “HSBC is highlighted as they were the advisers on recent debt and equity raising exercises and appear to have earned commission from underwriting.

“I am very concerned by this and ActionAid are looking to remove all business from HSBC asap.”

A spokesman for HSBC said he could not comment on individual cases, but that the bank had a policy of not working with companies that are devoted solely to the manaufacture and sale of weapons and defence equipment.

He added that the bank had agreed to meet with the authors of the report to discuss the issue.

Hall of shame

Few of the banks popular with civil society organisations emerged from the report with any credit.

No UK-based organisations are listed in the report’s 14-strong ‘hall of fame’, though Netherlands-based bank and prominent social funder Triodos was included, and the Co-operative Bank was one of 13 ‘runners up’.

Other banks included in the report’s ‘hall of shame’ for owning or underwriting shares or bonds in producers of cluster munitions or for providing loan facilities to them include Barclays, Lloyds TSB and Royal Bank of Scotland.

Apart from ActionAid, two other large international aid and development charities in the Charity 100 Index bank with HSBC, namely Salvation Army and Unicef.

The only international aid charities in the Charity 100 Index banking with the Co-operative Bank are Cafod, Christian Aid and Tearfund.

Meanwhile, seven of the 20 largest charity fund managers listed in Charity Finance's Fund Management Survey 2009 were included in the blacklist, namely Aberdeen, BlackRock, JP Morgan, Legal & General, Newton, Schroders and UBS.

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