MODENA, Italy (Reuters) - Banca Popolare dell'Emilia Romagna (BPER) (MI:EMII) is looking at merging with an equal or smaller rival, its CEO said on Saturday, ruling out a tie-up with a larger cooperative bank such as UBI Banca (MI:UBI) or Banco Popolare (MI:BAPO).
Italian cooperative banks have begun considering combinations after parliament in March passed a reform that overhauls their governance, abolishing limits to ownership and voting rights that staved off potential takeovers in the past.
The new rules apply to lenders with assets of over 8 billion euros (£5.7 billion).
The cooperative banks - or 'popolari' - have 18 months to become joint-stock companies once the Bank of Italy puts its seal on the reform, something expected to happen in May.
BPER, Italy's sixth-largest bank, will hire advisers in the next few weeks, Chief Executive Alessandro Vandelli told reporters after the bank's annual shareholder meeting.
In the northern regions of Lombardy and Veneto there are "entities with which the combination could be almost perfect," Vandelli said.
The cooperative lenders based in Lombardy and with a size similar to BPER are Banca Popolare di Milano (MI:PMII), Credito Valtellinese (MI:PCVI) and Banca Popolare di Sondrio (MI:BPS).
Unlisted Banca Popolare di Vicenza and Veneto Banca would be candidates based in Veneto.
The process to find a partner will start soon, but it will not be easy to complete a deal by year-end, Vandelli said, adding he considered a merger involving three banks too complex.