Intesa Sanpaolo, Italy's biggest retail bank, is in exclusive talks with a group of small Italian banks in the bidding for nearly 200 outlets, a financial source said on Monday confirming newspaper reports.

The source said banks Credito Valtellinese, Banca Popolare di Bari, Veneto Banca and Banca Carige have jointly bid more than 1.5 billion euros ($2.05 billion) for the bank outlets Intesa must sell to address competition concerns.

The consortium has beaten the likes of Intesa's rivals Credit Agricole and Banca Monte dei Paschi di Siena, all of which had submitted offers.

Negotiations with the consortium ... have sped up, said the source. Barring last-minute surprises, Intesa's board should approve the sale at its Sept. 11 meeting.

Bidders had until the end of August to submit offers. Other suitors included Popolare Vicenza, Credito Emiliano, Popolare dell'Emilia Romagna and Banca Popolare di Milano.