Industrial and Commercial Bank of China is set to become the first large state-owned Chinese lender to set up significant trading operations in London with a $765m deal to buy a majority stake in Standard Bank’s global markets business.

The move by China’s largest lender by assets comes as Chinese banks have regained their appetite to invest in London after the UK government launched a significant diplomatic initiative last year to attract them with special terms such as allowing them to set up lightly regulated branches.

The UK regulator had previously refused to allow Chinese banks to set up branches in London and it had been a bone of contention for Chinese lenders, some of which, including ICBC, rerouted parts of their business to Luxembourg.