London: China’s largest bank is buying the lease on Deutsche Bank’s huge London gold and silver vault, enlarging its footprint in the city’s bullion market, according to reports.

ICBC Standard Bank, which took a controlling stake in 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.

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,” Reuters quoted a source as saying.

Currently, five banks – JP Morgan, HSBC, Bank of Nova Scotia, Barclays and UBS – 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 company. They will decide whether to accept or reject ICBC Standard Bank’s application within the next few months.

“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 G4S.

“The figure that was initially talked about may have been around $4m, but it’s way lower now,” another source told Reuters, 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.