WARSAW--Polish insurer Powszechny Zaklad Ubezpieczen S.A. (PZU.WA) made a foray into the banking sector with the acquisition of a 25% stake in a medium-size bank Alior Bank SA (ALR.WA) for 1.6 billion zlotys ($427 million), the company said over the weekend.

The insurer will pay companies tied to Alior's majority owner Carlo Tassara PLN89.25 per share, about 4% below Alior's Friday closing price of PLN92.96.

Earlier this month, the insurer expressed interest in taking over rival banks in Poland seeking higher returns on its capital in a low interest-rate environment. The company's representatives said at the time it has between PLN3 billion and PLN5 billion to spend.

PZU, one of the biggest companies in Poland by revenue, has been actively pursuing acquisitions in many sectors across Central Europe trying to strengthen its operations.

It took over insurance rivals in Poland and the Baltics last year and is consistently acquiring healthcare service providers to strengthen its business in the sector. However, the company said earlier it doesn't plan to integrate its insurance operations with those of a potentially acquired lender.

Write to Patryk Wasilewski at patryk.wasilewski@wsj.com

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