Secret London gold vault sold from one bank to another
A secret London vault which can hold 2000 tonnes of gold and other precious metals has been sold by one big bank to another.
ICBC Standard Bank has paid an undisclosed amount for the precious metals storage business of British bank Barclays, which is in the midst of business transformation under new chief executive James E. Staley.
The vault sale is part of Barclays’ new strategy to improve its prospects by selling businesses not considered core operations. Instead, it will focus on consumer bank and corporate-investment bank divisions.
“This sale represents further progress with our non-core rundown as we work to simplify Barclays’ operations and achieve our cost and capital reduction commitments,” Barclays Non-Core division spokesman John Mahon said in a media release.
The vault, which has been in operation since 2012 and took more than a year to build, can also store other precious metals such as silver, platinum and palladium. Its location is secret but Barclays has reportedly confirmed the location is within the M25 road around London.
The location of the vault is a closely guarded secret. File photo: Thinkstock
Barclays announced in January it would leave the precious metals and moved the business into its non-core operations, which reportedly comprise unwanted assets worth £51 billion ($101 billion).
ICBC Standard was formed last year when China’s ICBC bought a controlling stake in the global markets business of Standard Bank, which originated in Africa.
The bank expects the vaulting business sale and related contracts to be completed in July.
“This enables us to better execute on our strategy to become one of the largest Chinese banks in the precious metals market,” Mark Buncombe, ICBC Standard Bank head of commodities, said in the statement. “The acquisition of a precious metals vault allows us to expand our services in clearing and processing.”
ICBC Standard joined London’s precious-metals clearing system last week. Other gold vaults in London are operated by HSBC Holdings and JPMorgan Chase & Co.
London’s over-the-counter system of precious metals trading has been largely unchanged for centuries. The London Bullion Market Association has asked companies to bid to create a new trading and reporting platform.
The World Gold Council reportedly in early talks with the London Metal Exchange and a group of banks to offer futures contracts.
With Bloomberg
