TOKYO, Sept 26 (Reuters) - U.S. private equity firm J.C. Flowers & Co LLC is seeking a buyer for a 20 percent stake in mid-sized Japanese lender Shinsei Bank, the Financial Times reported on Tuesday, citing people with direct knowledge of the matter.
The stake is worth about 100 billion yen ($895 million) based on current share prices.
A group of investors led by J.C. Flowers is the bank's largest shareholder with a 21.4 percent stake. The Japanese government also owns 18 percent.
Both J.C. Flowers and Shinsei declined to comment.
J.C. Flowers partnered with private equity firm Ripplewood to buy Shinsei's failed predecessor Long-Term Credit Bank of Japan in 2000 for $1.2 billion at the height of a banking crisis in Japan.
Shares in Shinsei were flat at the end of the morning session. ($1 = 111.6400 yen) (Reporting by Taiga Uranaka; Editing by Edwina Gibbs)