MILAN, Jan 28 (Reuters) - Shares in Banca Monte dei Paschi di Siena 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 is up 0.3 percent.

(Reporting by Francesca Landini, editing by Antonella Ciancio) Keywords: MONTEPASCHI SHARES/

(francesca.landini@thomsonreuters.com)(+39 02 66129437)(Reuters Messaging: reutersitaly.thomsonreuters@reuters.net)

COPYRIGHT

Copyright Thomson Reuters 2013. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.