A possible new force in Italian banking has begun to take shape, after regional lender Banco BPM SpA took a major stake in rival Banca Monte dei Paschi di Siena SpA.

Italy has begun to pave the way for a third big banking group in the country by selling a chunk of state-owned Monte dei Paschi di Siena (MPS) to rival Banco BPM and the fund manager partner of both lenders.

Investing.com - Shares in Banca Monte dei Paschi di Siena (BIT: BMPS) surged after Italy sold 15% of its stake in the bailed-out lender, raising 1.1 billion euros ($1.16 billion).