Pedestrians walk past a branch of ICBC (Industrial and Commercial Bank of China) in Shanghai, China, Dec 4, 2014. [Photo/IC]

ICBC Standard Bank, a subsidiary of Industrial and Commercial Bank of China Ltd, has agreed to buy Barclays PLC's precious metals vault storage business in London.

Upon completion of the acquisition, ICBC, China's largest commercial lender by assets, will become the first Chinese bank to have a vault in London, which is one of the largest precious metals vaults in Europe, the bank announced on Monday evening. The vault can store 2,000 tons of gold and other precious metals such as silver, platinum and palladium.

By owning a precious metals vault, ICBC Standard Bank will be capable of providing a precious metals clearing service. It will offer customized services including supply and inspection of precious metals, according to ICBC.

"This enables us to better execute our strategy to become one of the largest Chinese banks in the precious metals market," said Mark Buncombe, head of commodities at ICBC Standard Bank, in a statement. "The acquisition of a precious metals vault allows us to expand our services in clearing and processing," he added.

ICBC will gain the ability to provide one-stop precious metals services across the entire process, which includes clearing, market making, pricing fixing, vaulting and risk management. The bank will be able to carry out both retail and wholesale business on precious metals, whether they are paper or physical.

Earlier in May, ICBC Standard Bank was approved to join a precious metals clearing system operated by London Precious Metals Clearing Ltd, becoming the first Chinese bank to provide clearing services for London's precious metals market.

ICBC is the first banking group to be admitted to London Precious Metals Clearing Ltd since 2005, joining the other five members－Barclays, HSBC Holdings PLC, JPMorgan Chase & Co, the Bank of Nova Scotia and UBS AG.

"The admission will give China a louder voice and improve its status in the international precious metals market," the bank said in a statement.

Apart from the clearing service, ICBC Standard Bank will have the opportunity to play an important role in providing precious metals commodity leasing and financing intermediary services, according to analysts.

Since the start of its precious metals business in 2009, to the end of March, ICBC has recorded nearly 730,000 tons of total metals trading volumes with the value of transactions exceeding 7 trillion yuan ($1.07 trillion).

The bank has built a global investment management platform for precious metals and commodities while steadily pushing forward its business in core international financial markets. It was approved access to the gold price mechanism of London Bullion Market Association as a gold fixing pricer in April.

Barclays, meanwhile, has decided to exit the precious metals business in the wake of US and European Union regulators examining whether at least 10 banks, including Barclays, JPMorgan Chase & Co and Deutsche Bank AG, manipulated the prices of precious metals.