Banks and financial institutions profiting from weapons

How are banks financing the arms industry?

Banks are behind almost every industry in the world, through their loans, insurance and other kinds of financing, including the arms industry. 

By funding arms companies, banks allow them to grow and innovate – developing new forms of lethal weapons. In fact, banks are behind companies involved in the very worst forms of arms, such as nuclear bombs. 

Unsurprisingly, arms companies are not generally picky about who they sell weapons to. This means that banks are funding arms companies that sell weapons to regimes that use them against civilians, such as Israel. 

Which banks are involved in financing arms companies?

All of the major UK high street banks have been linked to arms funding. 

Ethical Consumer has rated and ranked 28 brands offering current accounts. Of the 28 brands, less than a third (nine) appeared to have robust policies against arms financing. Barclays, Santander, NatWest and Lloyds were all among banks that did not appear to have adequate policies. While some companies have said they will not fund the most destructive weapons, lots fall far short of refusing funding to arms companies altogether.

It is not just banks that are involved in the global arms trade. Lots of other financial institutions, such as investors and insurers, are also involved.

Banks, insurers and investors have also been named by civil society organisations, linking them to some of the very worst weapons and regimes, as we explore below. 

The majority of high street banks, including HSBC, TSB, Barclays and NatWest, lost marks in Ethical Consumer’s ratings for these financial ties, including to nuclear bombs. 

Financial companies are complicit in Palestine, Yemen and elsewhere

The reality of banks being linked to arms funding is that they are complicit in wars Palestine, Yemen and elsewhere.

Insurance companies support defence firms selling to Israel

Many financial companies are also providing backing for arms manufacturers and other defence firms that sell to Israel

In 2025, campaign group Boycott Bloody Insurance published a report identifying firms that underwrite or invest in companies that have supplied — or whose equipment has been deployed for — Israel’s military operations since October 7, 2023.

The report identified 16 companies “that supplied equipment to Israel with full knowledge it was being used to target civilian populations.” The following insurance companies held investments in these firms as of February 2025:

• Aviva: $881 million
• Allianz: $452 million
• Zurich: $180 million
• AXA: $177 million

Two firms that appear in Ethical Consumer guides were found to be also providing insurance to one or more of the defense firms: Allianz and Zurich. Insurance information is very rarely publicly available, meaning that many other insurance companies may also be involved.

Boycott Bloody Insurance is campaigning for institutions including churches, businesses and universities to drop these insurance companies. Read more about the Boycott Bloody Insurance campaign.

Banks fund sales of weapons that may be used against civilians

Evidence shows that crisis-affected countries are being supplied with arms by companies funded by European banks. These banks are linked to the human rights abuses that occur in these countries.

In 2022, peace campaigners PAX published a report examining these financial relationships. It identified arms firms supplying countries where weapons are at high risk of being used against civilians. Countries of major concern included Israel and Russia, as well as Saudi Arabia and the UAE, which have been involved in the bombing of hospitals, schools and residential areas in Yemen.

Who are they funding and how much?

Pax identified 15 of the largest arms producers in the world that supplied countries at high-risk of using weapons against civilians between 2016 and 2020. This included Airbus, which has sold weapons to countries including China, Saudi Arabia and UAE, and UK-based BAE systems, which has sold weapons to Bahrain, Iraq and Lebanon among others. 

European banks were providing nearly €88 billion in financial services to the 15 arms firms. We’ve listed totals for all the financial institutions that appear in our guides below:

• Deutsche Bank €14,892 million
• Santander €7,673 million
• HSBC €6,249 million
• Lloyds Banking Group €4,496 million
• NatWest €3,085 million

Responses from the companies

Some of the companies in the report responded to the allegations.

Airbus told Pax that it did not see itself as an arms company involved in controversial arms trade as they “help to make the world a safer place.” It stated that it was conducting business ethically and referred to its commitment to respect all applicable laws and regulations, including international sanctions imposed by the UN, EU, UK and US.

BAE Systems stated that it “recognise[s] the serious nature of the work we do and apply the upmost rigour to governance of sales of defence products and services. This includes a detailed evaluation through our Product Trading Policy which in addition to ensuring compliance with national and international protocols also includes assessment of likely use and end use of the product, human rights considerations and the requirement for full observance of our standards on anti-bribery and corruption.”

What weapons are banks funding?

Banks and other financial institutions are funding a range of arms and weapons including nuclear weapons and cluster munitions.

Banks and other finance institutions funding nuclear weapons

The campaign group PAX, a member of the Nobel Peace Prize winning International Campaign to Abolish Nuclear Weapons (ICAN), reports on global financing of nuclear weapons in its Don’t Bank on the Bomb report.

The 2026 Don’t Bank on the Bomb report found that 301 financial institutions had provided financing to 25 nuclear weapons producers, through over $709 billion in bonds and shares and just under $300 billion in loans and underwriting between January 2023 and September 2025.

Nuclear weapons financing increases

The report found that funding of nuclear weapons had increased since the last report – with financiers providing an additional $195 billion in share and bond holding values and $29.8 in loans and underwriting.

PAX noted that the growth followed a concerted push by arms producers and government officials to increase financing for the sector, after the outbreak of multiple conflicts.

It stated: “Geopolitical circumstances may have changed, but the humanitarian consequences of any nuclear weapons use remain unacceptable. As key players in the global economy, financial institutions have both the ability and the responsibility to address these risks. Through their leverage, financial institutions are key actors to drive respect for human rights and encourage companies to end their involvement in the nuclear weapons industry.”

The increase flies in the face of the Treaty on the Prohibition of Nuclear Weapons (TPNW), which came into force on 22 January 2021. The treaty explicitly prohibits the manufacture, production, and development of nuclear weapons, as well as assistance with those prohibited acts. 

The treaty was adopted by two thirds of UN member states but wasn’t signed by any of the world’s nine nuclear powers (the United States, Russia, France, China, the United Kingdom, Pakistan, India, Israel, and North Korea).

All these nine nuclear-armed states continue to modernise their nuclear arsenal, and many of the companies involved are funded by financial institutions.

Which companies are funding nuclear weapons?

Eighteen finance companies listed as funding nuclear weapons appear or own brands in our finance guides. The table below shows the size of their investments in nuclear companies in 2025.

Of all the 301 financial institutions in the report, Vanguard was the biggest investor. It increased its investments by almost $30 billion between 2024 and 2025.

JP Morgan was the second largest creditor, providing an additional $7.5 billion in loans and underwriting in 2025 compared to 2024. 

The report also noted that some companies had loosened their policies on nuclear weapons. For example, while Germany financial company Allianz was a long-time investor in nuclear weapons manufacturers, it announced in March 2025 that it would also include them in its ESG (environmental, social and governance) funds – which are supposed to have more robust ethical requirements. 

What can finance institutions do about nuclear investment?

The financial sector can, and should, encourage companies to make such shifts away from nuclear weapons by announcing divestment, issuing policy statements, and undertaking shareholder action.

In 2021, pressure from financial institutions was cited as the reason that Serco, formerly involved in development of the UK nuclear arsenal, would no longer bid for any nuclear weapon related contracts.

At the first Meeting of States Parties to the TPNW, in June 2022, Italian asset manager Etica Funds delivered a joint statement on behalf of a group of 37 investors, that called for the prohibition of all forms of financial assistance to the nuclear weapons industry. As put forward in the statement, ‘‘[i]t would be illogical to prohibit the production of nuclear weapons without prohibiting the financing that enables the production to proceed’’.

Progress on ending the use of cluster munitions

For years, banks were also linked to the financing of cluster munitions.

Cluster munitions are indiscriminate weapons that spread dozens or even hundreds of small bombs over an area the size of a football stadium or great. On impact, many of the bombs will kill or maim anyone in the area. Others will fail to explode, staying on the ground and acting like landmines, killing and injuring civilians long after a conflict has ended. 120 countries have signed a Convention that bans the use, production, stockpiling and transfer of cluster bombs.

In 2018, the campaign groups PAX and the Cluster Munition Coalition found that financial institutions had invested almost $9 billion in companies producing cluster munitions. 

However, the report also identified major successes for campaigners and international leaders: financing for cluster manufacturers had fallen by two thirds, from $31 million the previous year. Two arms manufacturers had fully ended the production and delivery of cluster munitions, removing them from the list of financed firms. 

“The global treaty banning cluster munitions is having a major impact on limiting investments in these weapons”, the groups said.

How does Ethical Consumer rate banks in terms of arms?

We focus on two key questions when rating banks, insurance firms and other financial companies in terms of their financing of arms manufacturers:

• Does the company have a robust policy in place to exclude loans and investments to arms and military firms?
• Has the company been criticised by any campaign groups or NGOs for financing arms and military firms? 

For example, multiple companies in our current accounts, insurance and investment guides lost marks after campaigners linked them to firms providing weapons to Israel or manufacturing nuclear weapons. 

In our shopping guides to financial services like current accounts and savings accounts, we highlight companies that have the best policies, so you can find more ethical alternatives.