In 2001 Dexia Group bought the Israeli Municipality Treasure Bank and established Dexia Israel. Dexia Israel has been giving long-term loans to municipalities of Israeli settlements in the occupied territories.

According to statements made by the CEO of the bank, since 2005 the bank has given long-term loans and other financial services to more than ten different Israeli municipalities in the occupied West Bank, including: Ariel, Elkana, Alfei Menashe, Har Hebron, Kdumim and Giv'at Zeev.

Following public campaigns led by the Belgian Intal group the bank announced in June 2009 that financing Israeli settlements is contrary to the bank’s code of ethics, and that since September of 2008 it has not provided new loans to West Bank settlements. However, countrary to this announcment, it has continued providing loan to local and regional councils of settlements after September 2008. Dexia Group has announced its intention to sale the Israeli bank, yet as to November 2011, the sell was not finalized.