[BEIJING] China’s largest state-owned bank plans to open a precious metals depository at Hong Kong International Airport, offering a boost to both the lender’s trading operations and the city’s ambitions to become a global gold hub.
The local unit of Industrial and Commercial Bank of China (ICBC) has leased space at the airport’s vault, according to sources familiar with the deal. The bank aims to get the depository ready in the next few months, they said, declining to be named discussing a private matter.
The move dovetails with the Hong Kong government’s intention to develop the city’s clout in the gold market. Chief executive John Lee has pledged to increase capacity for holding bullion to more than 2,000 tonnes over the next three years and establish a central clearing system for the precious metal.
The Shanghai Gold Exchange (SGE) has been in the forefront of that effort, having set up its first offshore vault in the city and launched two contracts for international investors.
ICBC is a clearing member at the exchange, the mainland’s main venue for trading bullion. The Hong Kong government has invited the SGE to participate in the clearing system it’s setting up, and ICBC’s unit in Hong Kong wants to be a member of that as well, the sources said.
The bank already runs a vault linked to the SGE in neighbouring Shenzhen, and has taken steps to expand its Hong Kong team that deals in bullion to help lift trading activity in the city, the sources said.
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The bank’s leasing deal comes amid the airport’s own growth plans. The Airport Authority Hong Kong released a blueprint last year that called for capacity at its vault to rise to an initial 200 tonnes from 150 tonnes, before a phased expansion that would take the space to 1,000 tonnes.
ICBC and the airport authority did not respond to requests for comment.
Hong Kong’s status as a financial centre, and its proximity to China’s massive gold market, make it an obvious choice for development as an international hub. Its liberal trade policy also positions the city as a natural bridge to the mainland, where import and export controls are tighter.
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