Woori Financial Group shares fell nearly 4 percent on Friday after Tongyang Life Insurance Co. cashed out of its entire 3.74 percent stake in the holding company.

The shares lost 3.86 percent to close at 11,200 won ($9.75) in Seoul trading on Friday.

Tongyang Life Insurance earlier in the day announced its board on Thursday approved a plan to divest its entire holding of 27,040,000 shares, or 3.74 percent, in Woori Financial Group for about 301.5 billion won ($262.4 million) on Friday. The holdings amount to 9.7 percent of its total equity capital 3.09 trillion won.

The divesture is to secure capital for better response to future new capital rules, the insurer said.

State-run Korea Deposit Insurance Corp. holds the largest 15.25 percent in Woori Financial Group.

Other stakeholders include National Pension Service, employee union, IMM PE, Korea Investment & Securities, Kiwoom Securities and Hanwha Life Insurance.

Tongyang Life Insurance shares closed 0.86 percent lower at 5,740 won.

By Lee Ha-yeon

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