Woori and Hana plans to engage in savings bank business

Acquisition of savings banks would help major lenders seen to delay potential systemic risk through diversification.

As South Korea's regulators consider how to prop up the nation's savings bank sector, lending giants Woori Finance Holdings Co. and Hana Financial Group Inc. said they may acquire some of the troubled banks reeling from real-estate loans that went sour.

South Korea's financial regulators, concerned the savings bank sector's woes could spill over into the wider economy, have directed certain savings banks to raise capital, merge or seek a buyer. Acquisitions of some of the troubled banks by Woori or Hana would boost the authorities' efforts.

In separate regulatory filings Thursday, Woori and Hana said they were considering buying savings banks and would make announcements once they formulate concrete plans. A day earlier, Woori Finance Chief Executive Lee Pal-seung said his firm may acquire several savings banks but didn't name any specific targets.

View the full story in The Wall Street Journal.