* Hong Leong Bank, Bank Rakyat among 11 bidders shortlisted
* Non-binding bids due next month
(adds detail about the auction, Indonesia's banking outlook)
By Saeed Azhar and Fathiyah Dahrul
SINGAPORE/JAKARTA, May 20 The Hong Kong unit of
Bank of China and Malaysia's Hong Leong Bank
are among the bidders shortlisted to buy Indonesia's
state-owned Bank Mutiara Tbk, people with knowledge of the
bidding process said on Tuesday.
Bank Rakyat Indonesia has also qualified to bid,
its finance director Achmad Baiquni told Reuters.
Poltak L. Tobing, an official at the state-run Indonesia
Deposit Insurance Corporation, told Reuters 11 bidders had been
shortlisted. He declined to identify any of the bidders.
Bank Mutiara offers investors a rare opportunity to own 100
percent of a lender in Southeast Asia's largest economy. Higher
interest margins and stronger loan growth in Indonesian banks
compared to those for lenders in neighbouring countries have
also attracted foreign institutions.
Bank Mutiara could fetch about $300 million, one person
familiar with the process said, lower than the 6.7 trillion
rupiah ($593.3 million) the government spent in 2008 to rescue
what was then called Bank Century. The rescue was part of the
government's efforts to avert a crisis in the banking system
after the global financial crisis.
The government said qualified firms can make offers for Bank
Mutiara in early June.
The relevant officials at Bank of China were not immediately
available to comment and Hong Leong did not reply emails seeking
comment. The sources could not be named because the bidding
process remained confidential.
The government can offer investors a 100 percent stake in
Bank Mutiara because it bailed it out, bankers said.
Two years ago, the Indonesian central bank imposed a 40
percent limit on single ownership in domestic banks. The
restriction forced Singapore's DBS Group Holdings to
abandon its bid to buy PT Bank Danamon last year and
also halted the planned sale of Indonesian units of some foreign
Indonesia's central bank said late last year that total
loans will expand between 15.3 percent and 16.6 percent in 2014,
slower than its initial forecast of 20 percent, in line with a
weakening in the economy.
Moody's Investors Service said in February that Indonesian
banks will continue to report strong financial fundamentals,
including high profitability and capital levels, despite the
economic slowdown that will put some pressure on asset quality.
(Reporting by Saeed Azhar and Fathiyah Dahrul; Additional
reporting by Eveline Danubrata in SINGAPORE; Editing by Denny
Thomas and Miral Fahmy)