Barclays to sell 2,000-tonne London gold vault to China's ICBC bank

Deal for one of Europe’s largest vaults to be completed July

 

ICBC Standard Bank expanded its push into London’s precious metals market by agreeing to buy one of Europe’s largest vaults from Barclays .

ICBC Standard, formed last year after Industrial and Commercial Bank of China — China’s biggest bank — bought a controlling stake in Standard Bank’s global markets business, expects the purchase of the vaulting business and related contracts to be completed in July, it said in an e-mailed statement Monday. No financial details were given.

About $5 trillion of transactions are cleared every year in London’s gold market, which Barclays is exiting as it pulls out of precious metals.

ICBC Standard last week  joined the city’s precious-metals clearing system and last month won classification as a market maker by the London Bullion Market Association.

“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 in the statement. “The acquisition of a precious metals vault allows us to expand our services in clearing and processing.”

Market Changes

There are changes coming to London’s precious metals market, where the over-the-counter system of trading has been largely unchanged for centuries.

The LBMA has asked companies to bid to create a new trading and reporting platform, while the World Gold Council is said to be in exploratory talks with the London Metal Exchange and a group of banks to offer futures contracts.

Those banks include ICBC, people with knowledge of the matter said earlier this year.

The vault, which can store 2,000 tons of gold and other precious metals such as silver, platinum, palladium, was opened by Barclays in 2012 and took more than a year to build.

ICBC Standard last week  joined the city’s precious-metals clearing system and last month won classification as a market maker by the London Bullion Market Association.

“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 in the statement. “The acquisition of a precious metals vault allows us to expand our services in clearing and processing.”

Market Changes

There are changes coming to London’s precious metals market, where the over-the-counter system of trading has been largely unchanged for centuries.

The LBMA has asked companies to bid to create a new trading and reporting platform, while the World Gold Council is said to be in exploratory talks with the London Metal Exchange and a group of banks to offer futures contracts.

Those banks include ICBC, people with knowledge of the matter said earlier this year.

The vault, which can store 2,000 tons of gold and other precious metals such as silver, platinum, palladium, was opened by Barclays in 2012 and took more than a year to build.

http://www.independent.co.uk/news/business/news/barclays-to-sell-2000-tonne-london-gold-vault-to-china-s-icbc-bank-a7032086.html