UPDATE 1-Banco do Brasil's CEO bank in talks with Bradesco to split card assets

(Adds CEO comments, details)

SAO PAULO, Aug 6 (Reuters) - Banco do Brasil SA is in talks with Banco Bradesco SA about a potential division of the payments assets they jointly hold, Chief Executive Rubem Novaes told journalists on Thursday.

Shares in the card processor Cielo SA, one of the assets both banks control, accelerated gains after his statement and were up more than 10% in the late morning trading.

Besides Cielo, both banks are partners in the credit card network Elo, employee benefits company Alelo, loyalty program Livelo, toll payment firm Veloe and card issuer Digio.

Novaes, speaking on a call to discuss second-quarter results, said the bank has hired a consultancy firm to help in the discussions, but both Bradesco and Banco do Brasil have faced some challenges with the payments companies’ valuation.

Banco do Brasil’s CEO, who has already announced he plans to leave the job, declined to disclose how the assets could be split between the banks.

Andre Brandao, head of global banking and markets for the Americas at HSBC in the country, has been picked by the government to replace him, a source told Reuters last week. nL1N2F306E

Reporting by Carolina Mandl, Editing by Franklin Paul and Steve Orlofsky