(Bloomberg) -- Slovenia’s largest bank Nova Ljubljanska Banka is looking to expand further in the western Balkans in the coming years, signaling its willingness for the acquisition of a sizable lender.

The Ljubljana-based bank has been on a shopping spree over the past five years, competing with Hungary’s OTP Bank Nyrt. to expand in almost all the markets in the western Balkans, except for Croatia, until now. It’s in the newest euro-zone member that NLB is most keen to enter, but open disputes between the neighboring nations have been preventing it from gaining a foothold there so far.

“We could easily buy a mid-tier bank in Croatia or one of the leading banks in Serbia,” NLB Chief Executive Officer Blaz Brodnjak said in an interview last week. The bank could absorb more than €4 billion ($4.3 billion) of risk-weighted assets and is scanning the Western Balkan market for potential acquisition targets, he said.

NLB’s most recent deal to buy a leasing company from Apollo Global Management and the European Bank for Reconstruction and Development announced last week could pave the way for it to expand into Slovenia’s southern neighbor, pending regulatory approval.

Still, Slovenia and Croatia, which joined the euro zone and the Schengen travel area this year, remain at odds over a historical border dispute and issues related to Yugoslav-era debt.

READ MORE: Slovenia’s NLB Seeks Croatia Toehold After Eurozone Support

NLB, which bought Serbian state-run Komercijalna Banka in 2020 and Sberbank PJSC’s Slovenian unit after the war in Ukraine started, will reveal its longer-term business strategy in May next year. It’s analyzing new ways to grow its business, including potentially entering a new industry such as insurance, or even a market outside its traditional region.

Balkan Expansion

Serbia, with its rapid economic growth and the population of 6.8 million people, remains a high priority market for NLB. However, the battle for expansion there could be tighter as other international banking groups are keen to seize the opportunity for growth.

“We would be very interested should a top Serbian bank become available,” Brodnjak said in the interview. “But we’re expecting a lot of competition.”

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