March 25, 2008 / 7:30 AM / in 10 years

HSBC drops out of race for Indonesia BII stake: source

SINGAPORE (Reuters) - HSBC (HSBA.L) has dropped out of the race to buy Singapore state investor Temasek Holdings’ 42 percent stake in Bank Internasional Indonesia (BII) while South Korea’s Kookmin 060000.KS has been shortlisted, a source briefed on the deal told Reuters on Tuesday.

“HSBC has dropped out,” said the source, adding Kookmin joined Malaysia’s top lender Malayan Banking Bhd (MBBM.KL) and Bank of China (601988.SS) as a final bidder.

    Temasek is very close to deciding the buyer for the stake, the source said.

    Temasek, which has stakes in two Indonesian banks, is trying to sell its 42 percent stake in BII to comply with a new central bank rule that bars foreign investors from owning more than one bank in Southeast Asia’s biggest economy. It also owns a controlling stake in Bank Danamon (BDMN.JK).

    Reporting by Saeed Azhar, editing by Neil Chatterjee

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