MILAN, June 10 (Reuters) - Shares in Italian banks fell sharply on Friday, hit by the rising risk premiums on the country's government bonds, of which lenders are large holders.

With the yield gap between Italy's 10-year bonds and equivalent, safer German Bunds at a fresh two-year record, shares in both UniCredit and Banco BPM dropped 5.8%, triggering automatic trading suspensions.

Intesa Sanpaolo lost 5%. BPER Banca which on Friday presented a new business plan dropped 8.5%. (Reporting by Valentina Za; editing by Agnieszka Flak)