Why strikes on Hezbollah’s ‘bank’ network could cripple the terror group

For Hezbollah, this represents not just a loss of physical assets but also a challenge to its ability to sustain the economic lifeline that has helped maintain its influence.

By Baruch Yedid, TPS

Israeli airstrikes on Hezbollah’s network of unofficial banks used to both raise and launder money could financially cripple the Iran-backed terror group.

The Al-Qard al-Hassan Association (AQAH), often referred to as Hezbollah’s “bank,” is technically a charitable association.

Based on information available from open sources, Israel apparently struck 20 of AQAH’s 34 branches in key Hezbollah strongholds, including Beirut, Tyre, Sidon and Baalbek on Sunday night.

In comments to The Press Service of Israel, one senior figure in the Israeli intelligence community described AQAH as “one of the largest centers of economic power for the Iranian proxy.”

She also suggested that its competition with the Lebanese banking sector contributed to the country’s economic instability, while Hezbollah benefitted from a parallel, unregulated financial system.

She told TPS-IL that the strikes would have a psychological effect on Hezbollah’s Shi’ite constituency because AQAH was involved with funding not only terror operations but salaries and welfare activities too.

Established in 1982, AQAH expanded significantly to 34 branches against the backdrop of Lebanon’s economic crisis.

It specializes in providing microloans to Lebanon’s Shiite community, which predominantly supports Hezbollah. These loans serve various needs, from wedding expenses to agricultural development and solar energy farms.

And by further financing hospitals, schools, housing and other Hezbollah social services in areas where traditional banking services are inaccessible or distrusted, AQAH bolstered Hezbollah’s ability to act as a “state within a state.”

According to Israeli officials, AQAH is believed to handle approximately $500 million in transactions each year, with a total turnover of $3.5 billion recorded before 2019.

The group’s financial activities have drawn scrutiny due to suspected connections with Iran, which is a major financier of Hezbollah.

In addition to providing loans, the bank allegedly serves as a means of laundering funds for terrorism-related activities. The U.S. Treasury Dept. sanctioned AQAH in 2007.

The fallout from the bombing may also resonate throughout Lebanon, exacerbating the financial crisis in a country already reeling from economic and political turmoil.

For Hezbollah, this represents not just a loss of physical assets but also a challenge to its ability to sustain the economic lifeline that has helped maintain its influence.

After the Hamas attacks of October 7, 2023, the Iran-backed Hezbollah began firing rockets and launching drones at northern Israel communities daily.

More than 68,000 residents of northern Israel are displaced from their homes. Hezbollah leaders repeatedly said they would continue the attacks to prevent Israelis from returning to their homes.

According to United Nations Security Council Resolution 1701, which ended the 2006 Second Lebanon War, the terror group is forbidden from operating in southern Lebanon.