Italian banking group UniCredit has agreed to sell a 32.8% stake in its Polish subsidiary Bank Pekao to local insurance group PZU and a local development fund.

The deal, valued at PLN10.6bn ($2.6bn), is expected to boost UniCredit's tier 1 capital ratio by about 55 basis points.

The transaction is anticipated to be wrapped around mid-2017 subject to regulatory and antitrust approvals.

In addition, UniCredit also started the sale of its remaining 7.3% stake in the Polish lender through secured equity-linked certificates.

UniCredit CEO Jean Pierre Mustier said: “In July, we announced the launch of an in-depth strategic review aimed at reinforcing and optimizing UniCredit's capital position, improving profitability, and ensuring continuous transformation of operations, whilst maintaining flexibility to seize value creating opportunities.

“This transaction is an early illustration of that review and I am pleased we have reached an agreement with PZU and PFR for the sale of a stake in Pekao. At the same time, the transaction will allow customers to continue to receive the same quality service they have come to expect from Pekao."        

The latest sale forms part UniCredit’s plans to boost capital under new CEO Jean-Pierre Mustier.

In July 2016, the Italian lender disposed minority stakes in Bank Pekao and its online bank FinecoBank as part of this strategy.