Shares were up more than two per cent in afternoon trading, at €20.48 - although they started to fall on the news.
The lender's shares have suffered in recent weeks after the departure of Prime Minister Matteo Renzi threatened to destabilise a deal - but Reuters reported today that the bank had formally approved a last-ditch attempt to raise €5bn through a debt swap and share issue.
According to the report, the minimum price for the share sale will be one euro per share.
The lender, which this summer was the worst-performing bank in European Banking Authority stress tests, is thought to be burdened with €360bn of non-performing loans.
Yesterday Italy's All-Share banking index slid after Moody's downgraded its outlook on Italian banks to negative, due to "increasing capital needs and weakening confidence".