Recently, CCB Suzhou Branch and Metalor Technologies (Suzhou) Ltd. signed the General Agreement on Gold Lease, marking the formal launch of gold lease business of CCB. It is a gold investment product initiated by CCB in the Chinese banking industry.

Gold lease is a business mode in which companies lease gold from CCB, return after it is due and pay cash interest to the bank. Gold price has big fluctuations. After a production cycle, if the gold market price drops, gold companies will suffer losses due to high raw material cost. Gold lease enables gold companies to have sufficient gold to meet their production need and at the same time avoid the impact of gold price fluctuation on their financial position and thus cut market risks. Jewelry and industrial processing companies using gold as raw material have fairly big demand for gold lease.

The gold lease business will be conducted at CCB branches, and the Capital Transaction Department of the headquarters is responsible for providing the branches with gold and setting the benchmark gold lease rate between the headquarters and the branches.

The launch of gold lease expands the investment products of CCB and helps it offer better services to gold production and processing companies. It also enables the bank to get stable interest rate margin and has become a new source of income for the bank’s intermediary business.