ROME--UBI Banca SpA said Thursday it planned a capital increase of up to 400 million euros ($422 million) to buy three Italian banks that were bailed out by the country's stronger lenders at the end of 2015.

UBI, which is Italy's fifth-largest bank by assets, said it had made a binding offer for Nuova Banca delle Marche, Nuova Banca Etruria e del Lazio and Nuova Cassa di Risparmio di Chieti for the "symbolic" price of EUR1.

The offer is for the three so-called good banks that emerged after bad loans were carved out Banca delle Marche, Banca Etruria e del Lazio and Cassa di Risparmio di Chieti and assembled into a separate bad bank.

UBI's share sale will allow the bank to maintain a Common Equity Tier 1 Ratio--a measure of capital strength--of more than 11%.

The three banks will need to shed around EUR2.2 billion in problematic loans before the closure of the sale, according to the terms of the deal.

If successful, the sale will cap more than a year in which the three banks struggled to find a buyer after they were bailed out and a good chunk of their problematic loans were purged from their balance sheet.

The rescue of the three lenders required, under European rules, that losses be imposed on shareholders and some bondholders.

UBI said that another condition of the deal was that Italy's resolution fund, which is financed mainly by the country's strongest lenders and owns the three banks, recapitalizes the three lenders by a total of EUR450 million.

"This is not a bailout," UBI's Chief Executive Victor Massiah said. "It's a normal transaction thought to deliver value."

Mr. Massiah said the takeoverof these banks would allow UBI to increase its market share and expand its business.

UBI's offer is valid until Jan. 18.

-Write to Giovanni Legorano at giovanni.legorano@wsj.com

(END) Dow Jones Newswires

January 12, 2017 10:47 ET (15:47 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.