Woori to close preliminary bidding for regional bank sales

Woori Finance Holdings Co. is set to end Monday the preliminary bidding for its regional bank units, its officials said, as part of the privatization process to sell the No. 1 state-funded banking group. The Korea Deposit Insurance Corp. (KDIC), the state-run debt clearer that holds the controlling stake in Woori Finance, will close the preliminary bidding for Kyongnam Bank and Kwangju Bank later Monday as planned, according to KDIC officials. The bidding is the first part of the government's three-staged sale plan of the banking group worth more than 300 trillion won (US$276.8 billion) as announced by the country's financial regulator in late June. Kyongnam Bank and Kwangju Bank have been grouped as Woori's regional bank unit out of 14 affiliates that will be put up for sale in three batches until the end of 2014. The government put up the public notice to sell the two regional banks on July 15. They are estimated to be worth around 1.3 trillion won and 1.2 trillion won, respectively. It is largely expected that two southern region-based financial companies -- BS Financial Group Inc. and DGB Financial Group Co. -- will submit their bids for both banks as they've shown strong interest. The state-run Industrial Bank of Korea (IBK) also plans to make a bid for Kyongnam Bank. Two consortiums, each consisting of local businessmen based in the southeastern and southwestern provinces, will hand in their own bids separately for Kyongnam Bank and Kwangju Bank. JB Financial Group Co., another regional financial firm, is expected to take part in the Kwangju Bank bidding. There have been speculations that two major South Korean banking groups -- Shinhan Financial Group Co. and Hana Financial Group Inc. -- may show up at the last minute. If the sale of the two banks falls through, they will remain as affiliates of the KDIC, the Financial Services Commission (FSC) said earlier. The FSC will auction off the brokerage unit, including Woori Investment & Securities Co., next month and the flagship unit Woori Bank in January.