Bank Pekao, the Polish unit of Italy’s UniCredit, is considering acquisition of Raiffeisen Bank International’s Polish subsidiary.

Pekao CEO Luigi Lovaglio opines that the acquisition of a smaller rival should get the go-ahead from the Polish financial regulator.

According to Lovaglio, "Taking into account that we have the highest Core Tier 1 ratio, it’s logical to expect that the regulator will not have anything against it."

The Austrian lender said that it was confident of securing a price above the book value of EUR1.44bn ($1.63bn) for its Polish operation.

However, Lovaglio said that the price is too high for Pekao adding that "Paying more than the book value is not our strategy."

Austria’s Raiffeisen Bank is looking to boost its capital buffers and to do so, is selling its Polish and Slovenian operations and its direct banking unit Zuno.

Moreover, the bank is also reducing exposure to the Russian and Ukrainian market, optimizing operations in Hungary, as well as significantly scaling back or exiting operations in Asia and in the US.

The measures are targeted at achieving an aggregate gross risk-weighted asset reduction of about EUR16bn in the selected markets by end-2017.