Top Chinese bank buys 1,500 tonne London gold vault

The world’s largest bank in terms of market value and assets under management, Industrial and Commercial Bank of China through its Standard Bank subsidiary is buying the London gold vault currently owned by Deutsche Bank.

The vault opened its doors mid-2014 and can hold 1,500 tonnes or more than 50m ounces of gold worth nearly $60 billion at today’s prices.

ICBC Standard Bank has also applied to become a clearing member of the London gold and silver over-the-counter operations to fill a seat left vacant by Deutsche Bank according to Reuters:

“Currently, five banks – JP Morgan, HSBC, Bank of Nova Scotia, Barclays and UBS – settle daily bullion transactions between dealers, amounting to more than $5 trillion worth of metal each year in the London over-the-counter market.

“These banks are shareholders of the London Precious Metals Clearing (LPMCL) company. They will decide whether to accept or reject ICBC Standard Bank’s application within the next few months. The LPMCL declined to comment.”

ICBC, which boasts more than four million business clients and services 410 million retail customers, paid $765 million for control of the London global markets unit of Johannesburg-based Standard Bank in 2014 to expand into the bullion and forex trade. In 2008 ICBC bought 20% of the 150-year old Standard Bank group, Africa’s largest bank, for $5.4 billion.

Top Chinese bank buys 1,500 tonne London gold vault

The rather non-descript appearance and location (for obvious reasons) of the vault, revealed by Zero Hedge after looking at the building application of the security firm G4S which runs the operation, is on Abbey Road in northwest London. According to the Reuters report the vault will change owners for “way below” the initial quoted figure of $4 million.