JAKARTA (Sept 15): Japanese finance company J Trust Co Ltd is set to buy Indonesia's PT Bank Mutiara Tbk to tap rising demand for retail finance in Southeast Asia's largest economy.

Bank Mutiara, previously known as Bank Century, was bailed out by the Indonesian government during the global financial crisis in 2008 and has been run by the Indonesian Deposit Insurance Corporation, or Lembaga Penjamin Simpanan (LPS).

Bank Mutiara has been restructuring its business under LPS' supervision and the state agency started a public bidding process to sell its 99.996 percent interest in the lender in April 2014.

The sale is exempt from the 40 percent cap on foreign ownership of commercial banks in Indonesia. It also comes at a time when Indonesian lawmakers are drafting bills to restrict foreign ownership in the banking, insurance and plantation sectors amid rising nationalist sentiment.

"The company submitted a letter of interest to acquire LPS' interest in Bank Mutiara and today, LPS disclosed that the company was selected as the successful bidder," J Trust said in a statement dated Friday.

J Trust said it wanted to help meet rising demand for retail finance in the country of about 250 million people, as personal incomes increase in line with Indonesia's strong economic growth that has outpaced most of the region in recent years.

J Trust Group's Singapore subsidiary already has a "strategic operational alliance" with Indonesia's Bank Mayapada Internasional Tbk.

J Trust said it needed the approval of the Indonesian financial services authority to become a major shareholder in Bank Mutiara. The company did not disclose its offer price.

A person familiar with the process previously said Bank Mutiara could fetch about $300 million, lower than the estimated 6.7 trillion rupiah ($564.45 million) that the Indonesian government spent to bail out what was then Bank Century.

Jakarta-based Bank Mutiara has 62 branch offices across Indonesia and a total asset value of around 13 trillion rupiah ($1.10 billion).

LPS executive head Kartika Wirjoatmodjo told Reuters in July that foreign investors were attracted by the opportunity to own 100 percent of the bank for 20 years. Bank Mutiara offered "significant franchise value" and potential to scale up quickly, he added.

The Hong Kong unit of Bank of China, Malaysia's Hong Leong Bank Bhd and an Indonesian conglomerate were among the short-listed bidders to buy Bank Mutiara, people with knowledge of the bidding process told Reuters.

Bank Rakyat Indonesia had also qualified to bid, its finance director previously said. (1 US dollar = 11,870.00 rupiah)