Shinhan Financial Co. and the Industrial Bank of Korea (IBK) have made their bids to buy a regional bank affiliated with Woori Finance Holdings Co., as the government moves to privatize the No. 1 state-funded banking group. Shinhan Financial, the fourth-largest banking group here, handed in a letter of intent (LOI) to the state-run debt clearer Korea Deposit Insurance Corp. (KDIC) to buy Kwangju Bank. KDIC holds the controlling stake in Woori Finance. IBK, a state-run lender that mainly caters to medium-sized firms, submitted its bid to KDIC to acquire Kyongnam Bank, the bank said in a statement. The government put up the public notice for a preliminary bidding for the two regional banks in July, with the deadline set for Sept. 23. 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. It is the fourth attempt by the financial authority to place Woori Finance in private hands, after its previous bids failed due to lack of buyers. 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. Each bank is estimated to be worth around 1.3 trillion won and 1.2 trillion won, respectively. DGB Financial Group Co., a Daegu-based financial company, and its rival BS Financial Group Inc., based in Busan, submitted their bid for both banks as of 3:00 p.m., their officials said. An official from DGB Financial said its final bidding can have a different outcome depending on due diligence on the banks, but the firm is mainly interested in Kyongnam Bank. Two consortia, each consisting of local businessmen based in the southeastern and southwestern provinces, handed in their own bids separately for Kyongnam Bank and Kwangju Bank. JB Financial Group Co., another regional financial firm, also made its bid on Kwangju Bank. 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.