UPDATE: Intesa Sanpaolo Keeps BMPS Branch, Delta Interest -CEO

Intesa Sanpaolo SpA (ISP.MI) is still interested in buying bank branches being sold by smaller peer Banca Monte dei Paschi di Siena SpA (BMPS.MI), the chief executive of the Italian banking giant said Thursday.

"Absolutely yes," Corrado Passera told reporters on the sidelines of a bankers' conference in response to a question about his bank's interest in the branches.

A newspaper report Wednesday said Intesa would offer about EUR200 million for 50 branches, mostly in the central Tuscan region.

Barclays PLC (BARC.LN) is also interested in buying branches from Monte dei Paschi, according to a person familiar with the matter.

Passera confirmed an earlier news report that Intesa had renewed talks with U.S. bank State Street Corp (STT) about the sale of its custodian business unit. "There are still talks going on with State Street," it said.

As for Intesa's interest in Delta, a consumer credit company, Corrado Passera said his bank was still conducting due diligence.

A day after the majority of Telecom Italia SpA's (TI, TIT.MI) core shareholders renewed a pact, Passera said he was satisfied with the way it turned out.

The pact, which controls Telecom Italia with a 24.5% stake, was confirmed for another three years.

However, one of its members, Benetton's holding company, Sintonia, is leaving the pact.

-By Guglielmo Valia and Carlo Renda with MF-Dow Jones, Dow Jones Newswires; [phone]; [e-mail]