Woori, Shinhan, Hana bid for ailing savings bank

Three banking groups, including top financial firm Woori Finance Holdings Co., expressed their intention to buy an ailing savings bank Tuesday, a state insurance agency that arranges the deal and sources said.

On Jan. 14, the financial regulator suspended mid-sized Samhwa Mutual Savings Bank for six months as it failed to meet regulatory capital requirements. State-run Korea Deposit Insurance Corp. is currently arranging to sell the troubled savings bank unless the bank normalizes its capital strength by mid-March.

“A total of three prospective buyers have submitted letters of intent to join the bidding,” KDIC said in a press release after closing the application process.

Sources said earlier that Woori Finance, Shinhan Financial Group Co. and Hana Financial Group Inc. were expected to express their intent to bid for the embattled savings bank.

No. 2 financial services company KB Financial Group was not expected to join in the preliminary bidding as its head has repeatedly put priority on improving its slackening profitability and efficiency over any takeover attempt.

The government is seeking to select a preferred bidder for the savings bank by mid-March after opening a bidding race in mid-February.

The move is part of the government’s drive to overhaul the troubled savings bank industry, which is struggling with a pile-up of rising bad loans stemming from sour construction project-related lending.

The head of Woori Finance said earlier the state-owned group will seek to buy one or more savings banks in a bid to help curb systemic risks stemming from soured property loans. 

(Yonhap News)