South Korea's third-largest banking group Hana Financial Group Inc. said Thursday it will merge Hana Bank with previously purchased Korea Exchange Bank (KEB) in the near future, saying the move will boost competitiveness.

"In order to cope with worsening conditions in the financial market, and to continue growth, we decided to merge (Hana Bank) with KEB," Hana Financial said in a regulatory filing, adding that it will continue talks with Hana Bank's labor union on conditions including employment security.

Hana Financial acquired KEB from U.S. buyout firm Lone Star Funds in early 2012 to become South Korea's No. 3 banking group. At the time, it promised to maintain both banks for five years in the face of protests from KEB's union.

During the takeover, Hana Financial and the KEB union agreed on terms under which the former would run KEB as an independent entity and maintain its current brand and wage system until at least 2017.

Hana Financial, however, looks set to push the merger sooner than expected as expressed in its latest regulatory filing.

Following the announcement, KEB's labor union called the move a "violation of the managerial agreement and a declaration to give up management of the bank."

The union said it will protest the move by joining forces with other financial organizations.

Earlier in the day, Hana Bank and KEB each held board of directors meetings, agreeing to push the earlier-than-expected merger of the two entities.