* PrimeCredit may fetch 2-3 times book value -sources
* Final bids due next month
* Chow Tai Fook Enterprises, UA Finance among others
(Adds details on PrimeCredit)
By Denny Thomas and Saeed Azhar
HONG KONG/SINGAPORE, May 23 Japan's Shinsei Bank
Ltd and Carlyle Group are among suitors who have
advanced to a final round of bidding for Standard Chartered's
Hong Kong consumer finance unit, people familiar with
the matter said.
The unit, PrimeCredit, has drawn bidders with returns on
equity of more than 40 percent that are sharply above rivals,
and could fetch between $500 million and $700 million, sources
have previously said.
That would be roughly equivalent to 2-3 times book value,
and compares with recent Hong Kong banks deals that have been
struck at a price-to-book ratio of about two. Standard Charted
acquired the specialist in high interest loans in 2004 for
HK$980 million ($126 million).
Other short-listed bidders include non-bank lender Pepper
Australia, United Asia Finance, a Hong Kong-based consumer
finance firm and Chow Tai Fook Enterprises, a private company
owned by Hong Kong's Cheng family, the people added. The Cheng
family also owns Chow Tai Fook Jewellery Group Ltd.
Final round bids are due next month, one of the people told
Reuters. Sources declined to be identified as the sale process
Shinsei, which is backed by U.S. private equity firm J.C.
Flowers & Co, declined to comment, as did Carlyle, Pepper
Australia and Chow Tai Fook Enterprises. Representatives for
United Asia Finance were not available for immediate comment.
Standard Chartered also declined to comment.
Having boosted profits during the wave of cheap credit that
poured into emerging markets for the past decade, Standard
Chartered is now slimming down as foreign money exits cooling
Asian economies. It cut 2,000 jobs last year.
Prime Credit's business is centered on high-risk, unsecured
lending to consumers with scant credit history, and doesn't fit
with Standard Chartered's core focus on global corporate banking
and high net worth clients, sources said.
Standard Chartered is also selling its consumer finance
business in South Korea, which has proved to be a tough market
for foreign banks amid rising costs and intense competition.
The streamlining by Standard Chartered follows a bigger move
by key local rival HSBC. The latter has sold or closed
63 businesses in the last three years in an effort to simplify
its structure, reduce risk and boost profitability.
($1 = 7.7537 Hong Kong Dollars)
(Reporting by Denny Thomas and Saeed Azhar. Additional
reporting by Taiga Uranaka in Tokyo, Stephen Aldred in Hong Kong
and Jane Wardell in Sydney.; Editing by Edwina Gibbs)