MILAN (MF-Dow Jones)--Intesa Sanpaolo (ISP.MI) chief executive Corrado Passera said Tuesday that the Italian lender is in talks with State Street (STT) on the possible sale of its custodian business unit.

Speaking on the sidelines of an event, Passera said that talks with State Street "are going on," without elaborating further.

Intesa Sanpaolo, Italy's largest retail bank, has already announced plans to sell its custodian business operations as part of a wider capital strengthening plan.

-By Eva Palumbo with MF-Dow Jones and Sabrina Cohen, Dow Jones Newswires, +39 02 5821 9906; sabrina.cohen@dowjones.com