The Croatian subsidiary of Hungary’s OTP Bank has signed an agreement to buy Splitska Banka, owned by the French Société Générale Group, OTP announced on December 21.

Hungary’s largest lender OTP has long suggested that it is looking for acquisition opportunities, primarily on the markets where it is already present. Press reports earlier this month suggested that OTP had also made an offer to buy United Bulgarian Bank, Bulgaria’s fourth largest bank.

Societe Generale Splitska is the fifth biggest lender in Croatia, active both in the retail and corporate segment. As a result of the acquisition, the market share of OTP Group in Croatia is expected to rise from the current 4.4% to approximately 10%. “OTP Bank has been present in Croatia since 2005 and its operation has been continuously profitable even during the economic crisis started in 2008,” OTP said in a statement.

The closure of the transaction is expected in the summer 2017, whereas the integration process may be completed by mid-2018, OTP said. The acquisition price was not disclosed. Splitska Banka had a book value of HRK3.5bn (€464.7mn) at the end of last year, and it had 3.4% return on equity (ROE), which was the second best in the country, Portfolio reports.

Croatian lenders have been at odds with the Croatian government over the Swiss Franc loan conversion programme. However, OTP’s decision to acquire Splitska Banka is market positive, showing the Hungarian lender’s confidence in the Adriatic country.

In the third quarter, OTP’s net profit pushed to an eight-year high of HUF69.79bn (€224.9mn), and assets stood at HUF10.95tn. On the back of the announcement the share price of OTP rose 1.2% on the Budapest Stock Exchange (BSE).