UPDATE 1-Spain's Caixabank expects to reach job cuts deal with unions by end of Q2

(Adds details on merger, comment from chairman)

MADRID, March 26 (Reuters) - Spain’s Caixabank expects to reach a deal with labour unions in the next few months on job cuts related to its merger with smaller rival Bankia, CEO Gonzalo Gortazar said on Friday.

The merger between the two banks, which became effective on Friday, created Spain’s largest domestic bank in terms of assets with a market value of about 16 billion euros($18.85 billion). “We expect to start talks with the unions after Easter ... and close negotiations by the end of the second quarter,” Gortazar told reporters on Friday.

He declined to give an estimate of how many jobs the bank intends to cut.

Cinco Dias newspaper reported on Thursday that Caixabank may cut between 7,000 and 8,000 jobs after the merger, citing unidentified sources.

The Bankia brand will gradually disappear from branches, chairman Jose Ignacio Goirigolzarri told the same news conference, adding that the name will start being withdrawn from corporate buildings as soon as this weekend.

Spain’s CNMC competition watchdog on Tuesday approved Caixabank’s acquisition of state-owned lender Bankia , though the merged entity will have to agree to a number of conditions in its retail banking arm.

The banks have said the combined entity would have 51,500 employees and 6,300 branches in Spain. They have not given any details of potential staff reductions or branch closures.

$1 = 0.8488 euros Reporting by Emma Pinedo and Inti Landauro, Editing by Ingrid Melander