LONDON, May 31 (Reuters) - HSBC is consideringselling its $670 million stake in PT Bank Ekonomi inIndonesia, potentially unwinding a deal struck five years ago asEurope's biggest bank continues to slim down and simplify.
HSBC said on Friday it was reviewing its strategic optionsfor its 99 percent stake in Bank Ekonomi after the IndonesiaStock Exchange asked Ekonomi to clarify its position following about of market speculation.
If it sells the stake it will reinvest the proceeds inIndonesia, HSBC said.
Chief Executive Stuart Gulliver has sold or closed more than50 businesses in the last two years and is continuing to shrinkthe bank by selling unprofitable or sub-scale businesses.
But he has said Indonesia is one of his 22 prioritycountries, as he focuses on faster growing markets. HSBC's loanbook in the country grew by 61 percent from 2010 to 2012.
The London-based bank paid $607.5 million for an 88.9percent stake in the Indonesian lender in October 2008, andanother $71.6 million in August 2009 for a further 10 percent.
It has a market capitalisation of $674 million, according toThomson Reuters data, after a jump this month in its illiquidshares.
HSBC has operated in Indonesia since 1884 and had 115branches there across 10 cities before the purchase. Ekonomi,established in 1989, added another 93 outlets and more than2,300 staff.
HSBC said at the time of the deal it would enhance itscommercial banking business there and make it one of the topthree foreign banks in the country.
HSBC made a $306 million profit in Indonesia last year, upfrom $259 million in 2011, and had 6.5 million customers.