MILAN: Shares in Italian banks rose in early trade on Monday ahead of a meeting later in the day in Rome between the country's largest lenders, the Treasury and the central bank to set up a fund to help ailing lenders.

The state-backed vehicle would likely buy bad loans and plug capital shortfalls at weak banks in Italy, five sources familiar with the matter said on Sunday. One of the source said the fund would have a maximum capitalisation of 5 billion euros ($5.7 billion).

At 0712 GMT, shares in Banca Monte dei Paschi di Siena were up 3.6 percent, while Banco Popolare rose 2.5 percent. The Italian banking index was up 0.22 percent.

Copyright Reuters, 2016