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(Adds sale of Barclays Italian retail network, names of biddersfor Italian mortgage portfolio)
By Massimo Gaia and Pamela Barbaglia
MILAN/LONDON, Sept 10 (Reuters) - Barclays is inadvanced talks to sell its Italian retail network and aportfolio of Italian mortgages worth 4 billion euros ($4.46billion) in two separate auctions, people familiar with theprocess said.
The British bank, which is shrinking its continental Europebusiness, aims to enter exclusive talks with prospective biddersin the coming weeks, one of the sources said.
The decision to sell the Italian retail unit and themortgage portfolio to separate buyers is to maximise value,after strong interest from U.S. asset managers and hedge fundsfor the mortgages, which are all performing, one of the sourcessaid.
U.S. asset manager Fortress, which bought UniCredit's non-performing loans management firm and a parcel ofits distressed loans in February, is one of the interestedbuyers, as is U.S. private equity firm Cerberus CapitalManagement, the source told Reuters on condition of anonymity.
Another source had said on Wednesday that U.S. money managerChristofferson, Robb & Company, as well as a duo comprising U.S.hedge fund Elliot Management and Italian credit firm Fonspa, anda bidding group made up of private equity firm Oaktree andItalian bank Creval were also looking to buy themortgages.
A spokeswoman for Barclays in Italy and representatives forall the potential bidders declined to comment.
Barclays has also shortlisted two undisclosed bankinginstitutions, one of which is Italian, to buy its local retailbanking network, the first source said. Barclays aims torecapitalize the unit before selling it, he said.
Barclays has reduced its Italian network to about 90branches, from 200 in 2010. It had 11.9 billion pounds ($18.3billion) of residential mortgage exposure in Italy at the end ofJune, down from 13.5 billion pounds at the start of the year.
The bank said last year it planned to sell its continentalEuropean retail banking operations and had put them in anon-core unit with other assets it intended to sell or run down.
Barclays has sold its retail banking operations in Spain andPortugal - but kept some activities, such as investment bankingand credit cards - and is still looking to sell assets inFrance. ($1 = 0.6513 pounds) (Additional reporting by Luca Trogni in Milan and Steve Slaterin London; Editing by Susan Fenton)
