Tags: china | london | vault | gold

China's $90 Billion London Vault Has Room for 2K TONS of Gold

China's $90 Billion London Vault Has Room for 2K TONS of Gold
(Michael Cizek/AFP/Getty Images)

Tuesday, 17 May 2016 10:25 AM

China has the capacity to store gold worth as much as $90 billion securely in a secret location now that its ICBC Standard Bank is buying Barclays' London precious metals vault, reported Reuters.

The vault is one of the largest in Europe, with a capacity to hold 2,000 tons of gold, silver, platinum and palladium. It has been operational since 2012.

ICBC Standard Bank said on Monday it has signed an agreement to buy the vaulting business and transfer the associated contracts, subject to consent. The deal is expected to complete in July.

ICBC Standard Bank specializes in commodities, fixed income, currencies and equities and was formed in February 2015 when Industrial and Commercial Bank of China bought a 60% stake in Standard Bank's London-based global markets business.

Neither ICBC Standard Bank nor Barclays disclosed the financial terms of the deal.

Barclays said in January it intended to exit from precious metals and moved the business into its non-core unit, which includes all the business it wants to sell or close.

Barclays' modern vault holds precious metals for pension funds, central banks, sovereign wealth funds and other investors. Most 'over-the-counter' gold and silver trading is cleared through the London market, and clearing banks provide services for clients to settle their gold and silver trades, and ultimately have to have access to reserves of physical metal.

ICBC Standard Bank will become the first Chinese bank to operate its own vault in the UK, joining a small group to have the facility.

Mark Buncombe, ICBC Standard Bank's head of commodities, said the deal is part of its plan to become one of the largest Chinese banks in the precious metals market.

ICBC Standard Bank said last week it had joined the London clearing system for gold, silver, platinum and palladium, the first bank to be admitted to the group since 2005.

London Precious Metals Clearing Ltd (LPMCL) operates a central electronic metal clearing hub, with deals between parties throughout the world settled and cleared in London.

Other members of LPMCL are Barclays, HSBC, JP Morgan, the Bank of Nova Scotia and UBS.

© 2019 Thomson/Reuters. All rights reserved.

   
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China has the capacity to store gold worth as much as $90 billion securely in a secret location now that its ICBC Standard Bank is buying Barclays' London precious metals vault.
china, london, vault, gold
351
2016-25-17
Tuesday, 17 May 2016 10:25 AM
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