China's ICBC bank to buy London’s precious metal vault

The world's biggest bank by assets, the ICBC Standard Bank of China, has struck a deal to buy one of Europe's largest and most secure gold vaults, located at a secret location within London's M25.

The vault, which can hold up to 2,000 tonnes of gold, silver, platinum and palladium,  is equipped with an electrified roof, and blast doors that can withstand rocket-propelled grenades.

The terms of the deal were not disclosed; but it is expected to be completed in July, reported BBC.

China accounts for more than a quarter of the global gold demand but trading of the yellow metal remains centred out of London and New York. Around $5 trillion in transactions were handled in London's bullion market last year.

ICBC Standard Bank's head of commodities Mark Buncombe said the purchase "enables us to better execute on our strategy to become one of the largest Chinese banks in the precious metals market".

Last week, ICBC Standard Bank became the first new bank in over a decade to join the London precious metals clearing system, joining banks such as Barclays, HSBC PLC, J.P. Morgan Chase & Co. and UBS Group AG.

"This enables us to better execute on our strategy to become one of the largest Chinese banks in the precious metals market," said Buncombe.

Despite a slight drop in demand for gold in the first quarter of 2016, China still accounts for over a quarter of the global demand for the metal, and has emerged as the world's largest consumer of the metal - overtaking India.

ICBC Standard Bank's purchase of the facility is the latest move by Chinese banks to expand in London as they look to become a bigger force in price-setting for commodities, from gold to nickel.

In December 2015, Tata Sons Ltd had signed a lon-term banking services agreement with ICBC (See: Tata Sons signs up China's ICBC for financial services).