KUALA LUMPUR, MALAYSIA - Malaysia's fourth-biggest lender RHB Capital will pay 1.2 billion ringgit (S$ 494.4 million) in cash for an 80 percent stake in Indonesia's PT Bank Mestika Dharma, joining rivals in the chase to gain a foothold in Southeast Asia's most populous country.

RHB said in a statement on Monday that it also had an option to buy an extra 9 percent stake in the bank.

The Malaysian bank said that it would also undertake a rights issue of 361 million shares, priced at 3.60 ringgit per share. Its stock was suspended and closed on Friday at 5.69 ringgit on Friday.

Malaysia's top two banks, Malayan Banking (Maybank) and CIMB , already have a presence in the underbanked Indonesian market.

"The country's relatively low penetration rate of banking services with a loan to GDP (gross domestic product) ratio of only 25 percent, against a population of 240 million, offers us immense opportunities," RHB said.

Analysts said loan growth in Indonesia's banking market is expected to be 15-25 percent this year.

Bank Mestika is based in Medan in Sumatra, Indonesia's third-most populous city after Jakarta and Surabaya.