South Korea's National Pension Service, the world's fifth-largest pension fund with $200bn in assets, is in talks with a number of foreign financial institutions to buy a stake in them.

Park Hae-choon, the new president of the Korean state-run pension fund, said the fall-out from the credit crunch, which has left many of the big western banks nursing hefty losses, had provided a "good environment" to make investments in attractive targets.