A huge bank vault in London, designed to hold up to 2,000 tonnes of gold, silver, platinum and palladium, is being sold to China’s ICBC Standard Bank.
ICBC Standard, which is the world’s biggest bank by assets, is the first Chinese bank to buy a vault in the UK capital. It needs the facility as it grows its precious metals business and seeks to have a greater influence on the pricing, dealing and storage of gold bullion.
The vault is in a secret location and was originally built on behalf of Barclays. The UK bank, which is leaving the precious metals business as it seeks to downsize and refocus its operations, opened the vault in 2012.
It took more than a year to build and is believed to be one of the biggest precious metals storage facilities in Europe. Barclays has never been precise about the vault’s location due to security reasons, but has said it is within the M25 motorway area.
ICBC Standard Bank and Barclays are expecting to complete the deal by the summer. It will make the Chinese group the eighth provider of precious metal storage facilities in London, alongside names such as the Bank of England and JP Morgan Chase.
ICBC is keen to have a vault in London as it grows its precious metals business because the capital, along with New York, is at the heart of international gold trading. The London bullion market dealt with an estimated £3.5 trillion in gold deals in 2015.
China is the world’s biggest gold buyer and is responsible for more than 25 per cent of international demand for the precious metal.
ICBC's head of commodities Mark Buncombe told the BBC that buying the vault “enables us to better execute on our strategy to become one of the largest Chinese banks in the precious metals market”.
As part of that strategy, it has also joined London’s precious metals clearing system.
