SEOUL -- The nominee to lead South Korea's financial regulator has said that a merger and acquisition of state-owned Woori Finance Holdings Co. is an option to privatize the country's top banking group by assets.

Shin Je-yoon, President Park Geun-hye's choice to lead the Financial Services Commission, said all investors should be allowed to place bids for Woori Finance and it would be better to quickly privatize financial firms that received public funds, according to a written answer to lawmakers as part of a parliamentary confirmation hearing.

South Korea injected 12.8 trillion won (US$11.5 billion) of taxpayers' money into Woori Finance to rescue the company from near bankruptcy during the 1997-98 Asian financial crisis.

South Korea has since sought to sell its 56.97 percent stake in Woori Finance to recoup the public funds, though its previous efforts fell through in recent years due to a lack of investor interest.

"A financial holding's merger and acquisition is a possible alternative to the privatization of Woori Finance," said Shin, who currently serves as vice finance minister.

He needs to undergo a parliamentary hearing, a process widely seen as a formality because the National Assembly has no power to reject the president's appointment.

Shin also called for a set of measures to increase oversight to minimize financial risks in case a financial holding merges with Woori Finance to become South Korea's first mega bank.

The government of former President Lee Myung-bak floated the idea of creating a mega bank, but it ditched the plan following the 2008 global financial turmoil.

KB Financial Chairman Euh Yoon-dae, known to be a staunch supporter of the creation of a mega-sized financial firm, said last year that his banking group will seek mergers and acquisitions after the group becomes healthier.

An official of KB Financial Group Inc. said he had no immediate comment. He asked not to be identified, citing the issue's sensitivity. (Yonhap News)