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RPT-ICBC Standard Bank buys Deutsche's London bullion vault - sources

Published 2016-01-08, 11:37 a/m
© Reuters.  RPT-ICBC Standard Bank buys Deutsche's London bullion vault - sources

(Repeats to attach to alert with no changes to text)
* ICBC Standard Bank growing bullion footprint
* Chinese-South African lender looking to become bullion
clearer

By Clara Denina
LONDON, Jan 8 (Reuters) - ICBC Standard Bank is buying the
lease on Deutsche Bank's DBKGn.DE London gold and silver
vault, enlarging its footprint in the city's bullion market,
four industry sources close to the companies said on Friday.
China's ICBC 601398.SS , which took a controlling stake in
Standard Bank's SBKJ.J London-based Global Markets business
last year, has also applied to become a clearing member of the
London gold and silver over-the-counter business.
No one at ICBC Standard Bank was immediately available to
comment and Deutsche Bank declined to comment.
The Chinese and South African lender is aiming to fill the
gap left by Western banks, which are retreating from commodities
to cut costs and reduce regulatory burden.
"They (ICBC Standard Bank) have taken on the lease for the
vault," the first source said.
Currently, five banks - JP Morgan JPM.N , HSBC HSBA.L ,
Bank of Nova Scotia BNS.TO , Barclays BARC.L and UBS
UBSG.VX - 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.
"They are applying for clearing membership at the moment,
but that's still subject to a vote, which has not taken place
yet," the source said.
The vault became operational in June 2014 and has a capacity
of 1,500 tonnes. It was built and is managed by British security
services company G4S (CO:G4S) GFS.L .
"The figure that was initially talked about may have been
around $4 million, but it's way lower now," a second source
said, without disclosing the figure paid for the vault.
Deutsche Bank resigned as a clearing member in 2015, after
closing its physical precious metals trading arm and withdrawing
from gold and silver benchmark price setting.

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(Editing by Pratima Desai and Katharine Houreld)

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