The management and supervisory boards of Raiffeisen Zentralbank Oesterreich (RZB) and Raiffeisen Bank International (RBI) have passed a resolution to merge the two banks.

The merger of the two banks is mainly aimed at increasing capital buffers of RZB.

Under the plan, parent RZB would be merged into RBI, in exchange for which RZB shareholders will receive shares in RBI the exact number of shares to change hands appear will not be revealed until December 2016.

The deal includes the “functions of RZB as the central institution of the Austrian Raiffeisen Banking Group as well as RZB’s equity participations, excluding the planned partial sale of the UNIQA shareholding”, RBI said.

The merged group will continue to be listed on the stock exchange, and will have a common equity tier 1 ratio (fully loaded) of 11.3% at 30 June 2016.

The merger plan will be put up for shareholder approval in January 2017.