Barclays PLC’s has agreed to sell its London precious-metals vault to China’s ICBC Standard Bank. The giant bank joined the prestigious London clearing system for metals, such as gold, silver, platinum and palladium. The latest move by ICBC will increase its role in the global infrastructure.
The vault is one of the largest in Europe which add value to ICBC in the capacity for 2,000 tons of gold and client and operational contracts.
The world’s biggest bank by assets, ICBC, would be the first Chinese lender to own a vault in London and make an influence in precious metals from pricing to storage. With the consumption in metals, Chinese banks have increasingly bid to own or help run the infrastructure in the global markets. Besides, the giant bank could form a high profile platform in the precious metals market. It also makes it easier for the bank to sell its services to western-based clients since it now has the location to store metals which is closer to the clients.
“London being the place where a lot of the bullion is traded, especially from an institutional perspective, it makes sense for them,” said Mark O’Byrne, director at Dublin-based brokers GoldCore. “Some people, particularly Western buyers, might be more inclined to have their gold stored in London than have their gold stored in China.”
“This enables us to better execute on our strategy to become one of the largest Chinese banks in the precious metals market.” Mark Buncombe, head of commodities at ICBC Standard Bank, said of Monday’s deal.