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  Home Page > Corporate Banking >Corporate Wealth Management >Precious Metal
Physical Gold Leasing
 

Service Introduction
This is a service for qualified corporate clients (including small enterprises, "lessee") to lease gold from ICBC and pay leasing fees in RMB as agreed in the contract. The lessee repays gold of the same amount when the contract expires. Gold offered for leasing are standard gold bars or ingots that are traded and delivered at Shanghai Gold Exchange. For example, Au9999 means 1-kg (standard weight) gold ingot of 99.99% purity. Delivery and repayment of the leased physical gold is processed via the member service system of Shanghai Gold Exchange. Leasing period is based on lessee's business cycle, not longer than 12 months for one lease.

Target Clients
Members of Shanghai Gold Exchange, or agent clients of the Shanghai Gold Exchange members, including:
1. Gold mining companies: mines, refineries.
2. Companies using gold: gold processing companies, companies selling gold, industrial companies using gold.
3. Other corporate clients related to gold production or gold business.

Features
1. Meet lessee's needs for daily production and operation.
2. Avoid the risks caused by fluctuations of gold prices.
3. Optimal financing structure and improved efficiency in the use of capital.
4. Lower financing cost for lessee.

Fee Schedule
Leasing fee = weight of gold under lease × daily leasing fee rate × leasing days × gold fix price.
Leasing fees should be paid in RMB. The rate of leasing fee is fixed during the leasing period. Gold fix price is the Shanghai Gold Exchange's closing price of the category matched with the leased gold one day before delivery.

Sources of Gold for Repayment
Three sources of gold are accepted, as below:
1. Gold bought from Shanghai Gold Exchange by lessee.
2. Gold delivered to warehouse of the Shanghai Gold Exchange with complete formalities by lessee (lessee should be gold ingot provider certified by Shanghai Gold Exchange).
3. Gold bought from ICBC by lessee at the highest price of the equivalent gold category at Shanghai Gold Exchange on the day of repaying gold.

Service Flow
Before applying for the first time:
1. Apply a loan card from the local People's Bank of China.
2. Complete loan procedures with ICBC on credit rating/granting.
3. For customers not opening accounts at Shanghai Gold Exchange, sign agreement with ICBC and open a trading account.
Steps:
1. Lessee submits application.
2. ICBC starts internal approval on the application.
3. ICBC signs contract with the lessee who supplies necessary business vouchers.
4. The two parties conclude the lending/borrowing/delivery of physical gold via the member service system of Shanghai Gold Exchange. Lessee can draw or trade the leased gold.
5. Lessee pays leasing fees as scheduled.
6. The two parties conclude the repayment procedure via the member service system of Shanghai Gold Exchange when the contract expires.

Consideration
1. Lessees who are qualified for ICBC's credit loan can lease physical gold under credit. Other lessees have to supply legal, full-value, valid guarantee.
2. Lessees who are qualified for ICBC's revolving loan can lease physical gold revolvingly.
3. Lessees who are eligible to apply for loans from ICBC again can continue leasing on the day when the contract expires.

Service Channel
All ICBC branches and subsidiaries that have opened corporate loan services.

Note: Information herein is for reference only. Industrial and Commercial Bank of China Limited reserves the final right of interpretation. Refer to the announcements and regulations of local branches for further details.


(2012-02-14)
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