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* PrimeCredit may fetch 2-3 times book value -sources
* Final bids due next month
* Chow Tai Fook Enterprises, UA Finance among othersshortlisted (Adds details on PrimeCredit)
By Denny Thomas and Saeed Azhar
HONG KONG/SINGAPORE, May 23 (Reuters) - Japan's Shinsei BankLtd and Carlyle Group are among suitors who haveadvanced to a final round of bidding for Standard Chartered's Hong Kong consumer finance unit, people familiar withthe matter said.
The unit, PrimeCredit, has drawn bidders with returns onequity of more than 40 percent that are sharply above rivals, and could fetch between $500 million and $700 million, sourceshave previously said.
That would be roughly equivalent to 2-3 times book value,and compares with recent Hong Kong banks deals that have beenstruck at a price-to-book ratio of about two. Standard Chartedacquired the specialist in high interest loans in 2004 forHK$980 million ($126 million).
Other short-listed bidders include non-bank lender PepperAustralia, United Asia Finance, a Hong Kong-based consumerfinance firm and Chow Tai Fook Enterprises, a private companyowned by Hong Kong's Cheng family, the people added. The Chengfamily also owns Chow Tai Fook Jewellery Group Ltd.
Final round bids are due next month, one of the people toldReuters. Sources declined to be identified as the sale processis confidential.
Shinsei, which is backed by U.S. private equity firm J.C.Flowers & Co, declined to comment, as did Carlyle, PepperAustralia and Chow Tai Fook Enterprises. Representatives forUnited Asia Finance were not available for immediate comment.
Standard Chartered also declined to comment.
Having boosted profits during the wave of cheap credit thatpoured into emerging markets for the past decade, StandardChartered is now slimming down as foreign money exits coolingAsian economies. It cut 2,000 jobs last year.
Prime Credit's business is centered on high-risk, unsecuredlending to consumers with scant credit history, and doesn't fitwith Standard Chartered's core focus on global corporate bankingand high net worth clients, sources said.
Standard Chartered is also selling its consumer financebusiness in South Korea, which has proved to be a tough marketfor foreign banks amid rising costs and intense competition.
The streamlining by Standard Chartered follows a bigger moveby key local rival HSBC. The latter has sold or closed63 businesses in the last three years in an effort to simplifyits structure, reduce risk and boost profitability.
($1 = 7.7537 Hong Kong Dollars) (Reporting by Denny Thomas and Saeed Azhar. Additionalreporting by Taiga Uranaka in Tokyo, Stephen Aldred in Hong Kongand Jane Wardell in Sydney.; Editing by Edwina Gibbs)
