Bloomberg News

HONG KONG - Oversea-Chinese Banking Corp. and Standard Chartered PLC have emerged as the frontrunners in a bidding war for Chase Manhattan Corp.'s Hong Kong retail unit, according to officials at banks pursuing the business.

Oversea-Chinese Bank, the third-largest bank in Singapore by asset size, and Standard Chartered, of London, are vying with Singapore's largest lender, DBS Group Holdings Ltd., and Hong Kong's Bank of East Asia Ltd. All four submitted bids last week.

Chase is expected to narrow the list in the next few days and to pick the winner next month, according to officials at the bidding banks and their advisers.

Officials among the four banks still bidding and at the investment bankers that are advising them said Oversea-Chinese and Standard Chartered are willing to pay about $1.3 billion for the business, while DBS and Bank of East Asia bid less than $1.1 billion.

"It's no surprise it's narrowed down to two foreign banks, as it's a sizable deal and the acquirer will have to have strong backing in capital and cash," said Herbert Hui, a banking analyst at SG Securities Ltd. of Hong Kong.

For Oversea-Chinese, Chase's retail business offers the opportunity to become a leading participant in a $3.8 billion credit card market with a single purchase.

For Standard Chartered, the business would help expand an already substantial presence to a point where it could better challenge HSBC Holdings PLC, which owns Hong Kong's two biggest banks. DBS is also looking to jump-start its Hong Kong operations, though it has placed a lower value on the business than Oversea-Chinese and Standard Chartered, the officials said. Bank of East Asia bid on the low side because it is concerned there will be an overlap between its existing card customers and the new names it would be purchasing, the officials said.

Citigroup, the world's largest financial services company, did not make a bid, though it was on a list of five banks culled from about 11 initial offers, because it also estimates many of Chase's customers are already served by Citibank in Hong Kong.

All the banks declined to comment on the sale.

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