A major investment group reportedly regrets its decision to blacklist Israeli banks.

A Dutch fund manager has told the Financial Times that senior executives at Netherlands pension fund PGGM wish it had not pulled funds from Israel's five top banks earlier this year.

PGGM became the first big investor to take its money out of Bank Hapoalim, Bank Leumi, First International Bank of Israel, Israel Discount Bank and Mizrahi Tefahot Bank. The reason given was their "involvement in the financing of settlements in occupied Palestinian territories".

At the time, the global Boycott, Divestment and Sanctions campaign against Israel hailed PGGM's move as a landmark decision.

But the anonymous Dutch source told the FT: "I don't think [PGGM] expected it to become the global story it did."

Despite rumours to the contrary, Dutch pension fund ABP and fund house Nordea Investment Management have confirmed they will remain invested in Israeli banks.