Chinese bank to buy giant London gold vault

Wednesday, May 18, 2016 - 09:32 (EEST) Section: Latest news

ICBC Standard Bank PLC said on Monday it is buying a precious-metals vault from Barclays PLC`s, in the latest move by the Chinese bank to increase its role in the market`s infrastructure, The Wall Street Journal reported.
The move makes parent ICBC, the world`s biggest bank by assets, the first Chinese lender to own a vault in London and extends its influence in precious metals from pricing to storage, The Wall Street Journal writes.
It is reported that the vault holds up to 2,000 metric tons in gold, silver, platinum and palladium at a secret location in London and can be used by investors, jewelers, miners and even countries to store their metal.
With China the largest consumer of many metals, the country`s banks have increasingly bid to own or help run the infrastructure in these markets, the report notes.
China accounts for more than a quarter of global gold demand, but trading in the metal was until recently largely run out of western banks and in markets such as London and New York, the report said.
ICBC Standard Bank, which was formed after the Chinese bought a majority stake in the markets operation of Standard Bank PLC in 2015, has made a big push into precious metals markets this year, according to The Wall Street Journal.
There are seven providers of vault services to the London bullion market, including the Bank of England and HSBC PLC. No financial details were disclosed on the deal, which is expected to be completed in July.