Ten financial firms including Shinhan Financial Group made the shortlist to acquire two smaller banks of state-invested Woori Finance Holdings Co., the financial watchdog said Friday.

The Financial Services Commission (FSC) said that the committee on overseeing sales of public assets selected 10 bidders out of 11 candidates for the group's two smaller units -- Kwangju and Kyongnam -- after reviewing their proposals.

Shinhan Financial, the country's No. 4 banking group, is seeking to buy Kwangju Bank, and Industrial Bank of Korea (IBK), which mainly caters to smaller firms, expressed its bid to acquire Kyongnam Bank.

DGB Financial Group Co., a Daegu-based financial company, and its rival BS Financial Group Inc., based in Busan, will vie to buy both banks.

The government is seeking to sell the group in three different batches -- regional banks, banking and brokerage units -- by the end of next year. The government has a 56.97 percent stake in Woori Finance.

The watchdog said that the committee is likely to select a preferred bidder for the regional banks by late this year or early 2014 after holding a final bidding in December. (Yonhap News)