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EXCLUSIVE-China's Legend in talks to buy stake in Luxembourg bank BIL - source

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HONG KONG/FRANKFURT July 11 (Reuters) - China's Legend Holdings Corp is in talks on a potential investment in Qatari-owned Banque Internationale a Luxembourg (BIL), a person with knowledge of the matter told Reuters.

Legend, owner of computer group Lenovo Group Ltd, has been in discussions to buy around 90 percent of the private bank from Precision Capital, an investment vehicle of Qatar royal family members including former Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani, the person said.

People familiar with the industry said they would expect BIL to fetch a price of 1-1.5 billion euros ($1.14 billion - $1.71 billion).

Chinese companies have become increasingly interested in European banks, despite the sector's struggles with low profitability and increasing regulatory burden.

In May, China's HNA became the largest direct shareholder in Deutsche Bank, while Fosun holds a 24 pct stake in Portugal's largest listed bank Millennium BCP.

The deal is likely to be finalised in the coming weeks and Legend is not looking to buy the remaining 10 percent of BIL which is owned by the Luxembourg government, the source said.

Another source close to Sheikh Hamad said Precision was in advanced talks to sell its controlling stake to a potential buyer but a final agreement had not yet been reached. The source declined to comment on whether Precision was talking to Legend.

The sources could not be identified as the talks are not public.

A spokeswoman at Legend and a spokesman for Sheikh Hamad's office in Doha declined to comment as did BIL. Precision and the Luxembourg government did not respond to Reuters' request for comment.

($1 = 0.8777 euros) (Additional reporting by Tom Finn, Robert-Jan Bartunek, Pamela Barbaglia. Editing by Rachel Armstrong and Jane Merriman)