Monte Paschi shares up 6 percent in early trade

The main entrance to Monte Dei Paschi bank headquarters is pictured in Siena January 25, 2013.

MILAN (Reuters) - Shares in Banca Monte dei Paschi di Siena (BMPS.MI) rose as much as 6 percent on Monday morning the Bank of Italy approved on Saturday the Tuscan lender request for state aid.

The Bank of Italy's backing was the final stage required to free up the 3.9 billion euros of state loans for Italy's third biggest lender, which last week revealed loss-making derivatives trades that could cost it 720 million euros.

At 0820 GMT Monte Paschi shares are up 4 percent at 0.2704 while Milan's blue chip index .FTMIB is up 0.3 percent.

(Reporting by Francesca Landini, editing by Antonella Ciancio)