MILAN: Shareholders in UBI Banca have approved governance changes that boost the influence of institutional investors, as Italian co-operative banks seek to reform following recommendations from the Bank of Italy.

Italy's banking regulator has long urged co-operative lenders, whose shareholders have one vote each regardless of the size of their stake, to reform and become more attractive for potential investors.

At a shareholder meeting on Saturday UBI sealed a governance reform that strengthens board representation for investors that together hold at least 10 percent of its capital.

A month ago shareholders in rival Banca Popolare di Milano (BPM) unexpectedly rejected changes in by-laws also aimed at giving institutional investors a greater say.

BPM's chief executive Giuseppe Castagna said on Friday that the bank would wait until next year's shareholder meeting to attempt again to pass the changes.