UPDATE 1-Malaysia's CIMB presses on with bad loan sales

(Updates with quotes, details)

KUALA LUMPUR, Aug 13 (Reuters) - Malaysia's No.2 lender CIMB sold 1.1 billion ringgit ($331.9 million) worth of non-performing loans to South Africa's Standard Bank (SBKJ.J: Quote, Profile, Research), the latest in a series of disposals designed to clean up its loan book.

The Malaysian lender, the banking arm of Bumiputra-Commerce Holdings (BUCM.KL: Quote, Profile, Research), said on Wednesday it expected to realise a gain of 106 million ringgit from the sale, comprising loans of 202 corporate and small- and medium-sized enterprise accounts which had earlier been written off.

The sale was priced at about one-fifth of the 1.1 billion ringgit loans, it said.

"This sale is another significant step in efforts to manage our substantial legacy NPL portfolio," CIMB chief executive officer Nazir Razak said in the statement.

CIMB last year set up a special unit to manage the group's 13.9 billion ringgit non-performing loans following a 2005 merger with state-owned lender Bumiputra Commerce Bank and the acquisition a year later of Southern Bank Bhd, a smallish Malaysian lender focusing on the SME segment.

The gross value of its NPL portfolio stood at 6.3 billion ringgit as of end-March, the bank said.

Malaysian banks have moved to strengthen their balance sheets in recent years by cleaning up legacy bad loans, some of which could date back to the 1998 Asian financial crisis.

Maybank (MBBM.KL: Quote, Profile, Research), the country's top lender, in January sold some $400 million worth of bad loans, which were mainly secured by residential properties, to Standard Chartered Bank (STAN.L: Quote, Profile, Research) and ORIX Leasing Malaysia.

The sale was the third by Maybank in two years. The bank last year sold two tranches of bad loans worth 424.8 million ringgit, netting about 256 million ringgit from the sale. Standard Chartered also purchased those loans. (Reporting by Soo Ai Peng; editing by David Chance/Tony Austin)