Media reports revealed that ANZ Bank may seek to expand its business in Asia by bidding for a $4 billion stake in Korea Exchange Bank.

Ranked as the fourth largest lender in Australia, ANZ may become the biggest strong bidder for KEB with its strong track record in foreign exchange and corporate lending. If successful, foreign buyers will gain entry to Asia's fourth largest economy.

According to RBS analyst John Buoaccorsi, KEB is said to be the cheapest market for banking in Asia.

"Multiples across the market in Korea are quite low, certainly compared to most of the Southeast Asian markets which have recovered quite strongly in the last 12 or 18 months. That's probably the attraction, and of course the fact that this stake is ... from a reasonably willing seller," he said.

Analysts remarked that local banking groups in Korea may be threatened if foreign entities such as ANZ emerge as one of the strong competitors. KB Financial Group and Hana are expected to join the bidding race for KEB.

ANZ's representative did not specify details on the report; however, he said the bank is constantly looking for acquisitions.

Lone Star and Korea Exchange Bank on the other hand, did not release statements today.

CEO Michael Smith of ANZ disclosed to media yesterday that he wanted the bank to penetrate with the Asian market alongside HSBC and Standard Chartered. He said the bank will also seek an expansion in South Korea and Japan.

A source familiar with the situation confirmed that AZN already started its preliminary stage to bid for a KEB stake, but has not yet selected an adviser.

HSBC is speculated as another potential bidder, after it failed its acquisition with KEB earlier.