Hezbollah has backed away from plans to open a new branch of its Al-Qard Al-Hasan financial institution in the southern Lebanese city of Tyre after local residents objected, in what appeared to be a rare retreat by the group in the face of public pressure.

Residents opposed to the move argued that most Al-Qard Al-Hasan branches had previously been targeted by Israeli military strikes during past rounds of fighting, making any new branch a potential target if hostilities were to resume and exposing nearby residents to significant danger.

The episode has also fueled discussion about what some observers see as a shift in public opinion within Hezbollah’s traditional Shiite support base.

“There has been a significant change in the Shiite mood, to the point where it is no longer natural to see the entire community rally behind every decision Hezbollah makes, as used to happen in the past,” political activist Hadi Mourad told This Is Beirut.

“We used to witness an almost complete consensus behind the party’s decisions, from the smallest matters to major decisions such as going to war with Israel. Today, those standards have changed.”

Mourad said the shift was driven by two main factors.

“The first is Hezbollah’s series of wrong decisions, which led the country and the Shiite community into a tunnel of death, destruction, and displacement,” he said. “As a result, the party has lost the trust of many people because it was seen as carrying out the orders of the Supreme Leader.”

“The second factor is the stance of Lebanese Shiite opponents and independent figures who said no to Hezbollah and maintained that position even when the party was at the height of its power,” he added. “People have come to believe that the narrative of those critics ultimately proved more accurate than Hezbollah’s narrative, which had always promised to protect them and rebuild for them.”

Israel has long viewed Al-Qard Al-Hasan as part of Hezbollah’s financial network, while Hezbollah supporters describe it as a social and economic institution serving the group’s constituency.

Local media reported that Hezbollah has “taken a step back” in response to the backlash, saying the group’s hesitation appeared intended to avoid provoking further resentment among local residents.

The Lebanese government, led by President Joseph Aoun and Prime Minister Nawaf Salam, has taken steps against the institution but has not banned its operations. Last month, Justice Minister Adel Nassar asked the prosecutor general’s office to investigate Al-Qard Al-Hasan, including possible money-laundering violations.

Lebanon’s central bank barred licensed financial institutions in July 2025 from conducting direct or indirect transactions with Al-Qard Al-Hasan, and the United States has maintained sanctions on the institution for years, adding new sanctions only last month.