UPDATE 2-Foreign banks bid for Egypt's Banque du Caire

(changes dateline to Cairo, adds background, valuation details, quotes, industry data)

By Jonathan Wright

CAIRO, June 24 (Reuters) - Foreign banks on Tuesday started submitting final bids to buy 67 percent of Banque du Caire from the Egyptian government in the largest privatisation in Egypt since the sale of Bank of Alexandria in 2006.

Mohamed Barakat, the chairman of Banque du Caire and sister state-owned bank Banque Misr, said the winner of a public auction would be announced on Wednesday. He was quoted by the Egyptian state news agency MENA.

The five banks cleared to bid are London-based Standard Chartered Plc (STAN.L: Quote, Profile, Research), Saudi Arabia's Samba Financial Group 1090.SE, National Bank of Greece SA (NBGr.AT: Quote, Profile, Research), Dubai's Mashreqbank MASB.DU, and a consortium of Saudi Arabia's Arab National Bank 1080.SE and its Jordanian affiliate Arab Bank Group ARBK.AM.

The government has said it expects the sale to raise at least $1.6 billion, the amount it received for an 80 percent stake in Bank of Alexandria, sold in October 2006 to Italy's Sanpaolo (ISP.MI: Quote, Profile, Research). That sale was a landmark move in reducing the role of the state in the economy.

Banque du Caire, the third-largest state-owned bank, is larger than Bank of Alexandria but it has not gone through the same radical restructuring and improvements.

Before selling Bank of Alexandria, the government cleared up its portfolio of non-performing loans, retrained staff and renovated many of the bank's branches.

"Banque du Caire is a bank that still needs work and that work will cost money," one banking analyst said.