A plan to sell some of the government’s stake in Woori Financial Group this year foundered due to the high market volatility triggered by the COVID-19 pandemic, the financial regulator said Wednesday.

Earlier this year, a sub-committee of the Financial Service Commission, which controls the sale of state-owned firms and shares, said it would start selling off Korea Deposit Insurance Corp.’s stake in the bank in the first half of 2020. 

The plan was to sell the entire stake in phases, with the last sale completed by 2022.

The KDIC had acquired ownership of the banking group in March 2001 to keep it in business in the wake of the 1997-1998 Asian financial crisis. Previous stake sales since then took its ownership of the group down to a 17.25 percent stake. 

“The Public Funds Oversight Committee has recently decided not to proceed with the sell-off this year as the stock market plunged amid the pandemic, while the US presidential election campaigns aroused market uncertainty,” the sub-committee said, adding that the plan of a complete sell-off will be carried out by 2022 as planned.

Woori Financial‘s stock price hit a low of 6,320 won ($5.82) in March amid the stock market plunge. 

Despite the financial group’s aggressive mergers and acquisitions, its stock price remained below 10,000 won in morning trading Wednesday. 

The KDIC, for its part, has been silent about its target price for the sale. Observers have suggested that the price of a Woori share should be at least 12,000 won so that the government can retrieve investment in the bank. 

By Choi Jae-hee (cjh@heraldcorp.com)