ICBC Standard first China bank to own London vault

The vault, which is in a secret location, can hold up to 2,000 metric tonnes of gold, silver, platinum and palladium. The deal will give ICBC more influence over trading, pricing and storage of precious metals.

No financial details were given but the deal with Barclays is expected to be completed in July, the BBC reported. China accounts for more than a quarter of global gold demand but trading of the yellow metal remains centred out of London and New York. Around 3.5 trillion pounds in transactions were handled in London’s bullion market last year.

ICBC Standard Bank’s head of commodities Mark Buncombe said the purchase “enables us to better execute on our strategy to become one of the largest Chinese banks in the precious metals market”. Last week, ICBC became a member of London’s precious metals clearing system, which is where trades are settled.

As ICBC takes on more Western clients, the bank needs infrastructure close by to store the physical gold or metals. Barclays, meanwhile, is exiting the precious metals business as part of a restructuring aimed at making the bank smaller and more focused.

The vault owned by Barclays is one of the largest in Europe and took more than a year to build. It was opened in 2012 by Barclays, which says it is located within the M25 motorway that circles 

London.