NongHyup Financial Group Inc., South Korea's fourth-largest banking group by assets, plans to sell its 98.89 percent stake in its insurance unit, Woori Aviva Life Insurance Co., to DGB Financial Group, a local banking group, industry sources said Thursday.

NongHyup Financial Group will sign a preliminary deal to sell its stake in the insurance company to DGB Financial Group, led by the Daegu Bank Ltd., which is based in Daegu, about 300 kilometers south of Seoul, shortly after its board meeting to deal with the stake sale on Friday, the sources said.

NongHyup Financial Group took over the insurance company, Woori Investment & Securities Co. and Woori Savings Bank from Woori Finance Holdings Co. in April.

In July, NongHyup Financial cut 30 percent of Woori Aviva Life's workforce in a bid to merge it with its insurance unit, NH Life Insurance Co.

NongHyup Financial, however, decided to sell its stake in Woori Aviva as DGB Finanical Group showed its will to buy the life insurance company, they said.

If the initial deal is signed, DGB Financial Group will study the books of Woori Aviva for six weeks from as early as the middle of this month.

The deal is expected to be finalized around January next year, the sources said. (Yonhap)