OTP neither confirms nor denies that it is looking to buy Luminor. However, a spokesman for the bank said it was looking for opportunities to expand.

"As the OTP Group is very well capitalized and our liquidity position is also very good, we are currently looking for new acquisition opportunities," Bence Gaspar, communications manager at OTP Bank, said.

U.S. investment firm Blackstone, which owns a majority stake in Luminor, declined to comment. Experts here say that talks are probably still at a stage where a deal could be about nine months away. The bank's ties to Russia, in particular, could overshadow the process.

Valeria Kiisk, a partner at Redgate Capital, said that if there are numerous red flags and a genuine fear of a shift towards the east, the central bank will not approve this transaction. "In fact, regardless of the buyer, this transaction would require central bank approval." 

OTP said its stake in Russia today is very small at 0.14 percent. The bank's spokesman added that the Russian stake would be further reduced, while the stake in Ukraine would be increased.

"We are looking for potential buyers to sell our Russian units, but it is not easy because the sale requires the signature of the president," Gaspar said.

"If we sell our bank, probably 35 percent of its value could be the final purchase price, which means 65 percent will go to the Russian economy," he said.

OTP is the largest bank in Hungary and one of the largest in Central and Eastern Europe. Last year, OTP generated a €2.5 billion profit.

"OTP has been one of the fastest-growing banks in Central and Eastern Europe in recent years. Last year, they bought a bank in Slovenia and a bank in Uzbekistan. With the acquisition of Luminor, they would get three more countries," Mehis Raud, a partner at Trigon Asset Management, said.

The arrival of a new bank would be good for competition here, he added. "If there was somebody who was a stronger player, who had access to cheaper money from Europe, I mean deposits in particular, that could have an impact on the competition, and why not lower all these risk margins that the banks are asking for?"

Luminor declined to comment on Friday. OTP Bank's previous practice has been to keep the name of the previous bank in the event of a takeover, which means that Luminor will most likely maintain its name in Estonia.

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