UPDATE 2-Market Chatter -- Corporate finance press digest

(Adds KBC, EFG, Matalan, Deutsche Boerse)

BANGALORE Oct 28 (Reuters) - The following corporate finance-related stories were reported by media on Wednesday:

* Belgian banking and insurance group KBC (KBC.BR) will not have to divest its insurance activities in return for receiving state aid, but it will have to shrink its balance sheet, Belgian daily De Tijd said. [ID:nLS633122]

* EFG International AG (EFGN.S), a Switzerland-based private bank and asset management group, could imagine going private, its chief executive told the Handelzeitung newspaper. [ID:nLS600614]

* Several major private equity groups are examining 1.5 billion pound bids for discount retailer Matalan [MTLAN.UL], the Financial Times reported.

* Deutsche Boerse AG is emerging as the front-runner to bid for the state-owned Polish bourse, the Warsaw Stock Exchange, the Wall Street Journal said on its website.

* U.S. private equity firm Blackstone Group (BX.N) has opened discussions with lenders to slash up to $5 billion in debt held by its unit Hilton Hotels, the Wall Street Journal said, citing people familiar with the matter. [ID:nBNG135930]

* Vietcombank VCB.HM, Vietnam's largest partly private bank, has asked the central bank to raise its credit growth cap for 2009 to 28 percent to support rice exports and oil products, state media reported. [ID:nHAN120716]

* Liechtenstein-based LGT Bank would be interested in BHF Bank, a unit of Sal. Oppenheim, were it to be put up for sale, an executive at LGT told German daily Handelsblatt on Tuesday. [ID:nB539525]

For Deals of the day, please click on [ID:nBNG126064] (Compiled by Shivani Singh; editing by Karen Foster)