Scotiabank subsidiary 1832 Asset Management has further reduced its stake in Israeli arms maker Elbit Systems, as the bank faces pressure to halt such investments due to the war in the Gaza Strip.
1832 Asset Management said in its latest filings that it has reduced its stake by more than 40% from the previous quarter, leaving it with about $113 million in the company, or 1.44% of Elbit’s total shares.
Its maximum stake in 2023 was just over 5% of Elbit shares, worth around 467 million. This made 1832 Asset Management the largest foreign shareholder in Elbit.
The investments have sparked widespread protests against Scotiabank, with protesters calling on it to divest because of the way the weapons are being used in the war in Gaza, which the Palestinian Health Ministry says has killed more than 39,000 Palestinians.
Protesters have called for divestment, including by organizing ” sit-in ” at Scotiabank headquarters and disrupted speeches by President and CEO Scott Thomson.
Scotiabank said the pressure had not influenced its subsidiary’s investment decisions.
“Individual securities are held on their investment merit and are not influenced by protest activities,” the bank said in a statement.
Scotiabank said it does not directly own the shares and cannot interfere in the independent investment decisions of its portfolio managers, including its subsidiary 1832 Asset Management.
The bank says holdings fluctuate over time because portfolio managers seek to deliver strong risk-adjusted returns.
The filings show that 1832 Asset Management has held at least 2.23 million shares since December 31, 2021, when Elbit shares failed to rise above $175 on the Nasdaq. The shares have since traded as high as $244 and are currently selling for around $197.
Elbit noted in its most recent results that it recorded a 12% increase in revenue from the previous year as it saw strong demand for its products, including “significant increased demand” from the Israeli Defense Ministry.