ICBC Standard Bank buys Deutsche's London bullion vault - sources

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* ICBC Standard Bank growing bullion footprint

* Chinese-South African lender looking to become bullion clearer

By Clara Denina

LONDON, Jan 8 (Reuters) - ICBC Standard Bank is buying the lease on Deutsche Bank (Other OTC: DBAGF - news) 's London gold and silver vault, enlarging its footprint in the city's bullion market, four industry sources close to the companies said on Friday.

China's ICBC (HKSE: 1398-OL.HK - news) , which took a controlling stake in Standard Bank's 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.

No one at ICBC Standard Bank was immediately available to comment and Deutsche Bank declined to comment.

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," the first source said.

Currently, five banks - JP Morgan, HSBC, Bank of Nova Scotia (Other OTC: BKSHF - news) , Barclays (LSE: BARC.L - news) 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 (LPMCL) company. They will decide whether to accept or reject ICBC Standard Bank's application within the next few months. The LPMCL declined to comment.

"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 (Other OTC: ITGL - news) was built and is managed by British security services company G4S (Copenhagen: G4S.CO - news) .

"The figure that was initially talked about may have been around $4 million, but it's way lower now," a second source said, 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. (Editing by Pratima Desai and Katharine Houreld)