The unit is known as Fullerton Financial Holdings Pte Ltd, and BII said: 'Fullerton Financial Holdings expects to complete the sale before December 2010'.

The decision is in line with the ownership structure adjustment plan submitted by Fullerton to the central bank in Dec 2007, it said.

'After evaluating both options as stated in the ownership structure adjustment plan, Fullerton Financial Holdings has selected the option to sell its investment in BII,' the bank said.

'The management of BII respects Fullerton's decision. This is, however, a shareholder's issue and does not affect the day-to-day operations of the bank. The bank continues to operate on the basis of business-as-usual,' BII president Henry Ho said.

Fullerton Financial holds a 75 per cent stake in Sorak Consortium, which in turn owns 56.13 per cent of BII shares. South Korea's Kookmin Bank owns the remaining 25 per cent stake in Sorak.

Temasek also controls Bank Danamon through Fullerton.

Selling BII or merging it with Danamon were options given to Fullerton as means of complying with a Bank Indonesia regulation, known as the single presence policy, which prohibits certain parties from controlling more than one local bank by the end of 2010.

Separately, Bank Danamon said in a statement that by choosing the option to sell its BII stake, Fullerton has ruled out the other option of merging BII with Danamon.

Fullerton will remain the controlling owner of Danamon, it said.

In Monday's trade, BII rose 10 rupiah to close at 330, while Bank Danamon fell 50 rupiah to 6,950 rupiah. -- AFP