The board of Italy's Banca Nazionale del Lavoro has backed a €6.5 billion bid from Spain's BBVA, making it harder for the Bank of Italy to block the country's first foreign banking takeover.

BNL, Italy's sixth-largest bank, said 12 of 13 board members yesterday concluded the bid was fair and made business sense.

Spain's number two bank BBVA announced its intention to buy out BNL last week, and ABN Amro of the Netherlands followed a day later with plans to launch a bid for Banca Antonveneta, Italy's number nine lender. The parallel bids are the biggest challenge to date to Italy's restrictions on foreign banks owning Italian ones.

The Bank of Italy has used its veto powers to limit foreign investors to small stakes in the country's financial institutions and favours Italian-led consolidation.

This month it must decide whether the bids can proceed, risking a row with the European Commission if it blocks them.

"This vote doesn't mean BNL shareholders will sell their shares, but it does make it harder for the Bank of Italy to say 'no'. In the past it has opposed bids on the grounds that they are hostile," a banking analyst in London said.

Shares in BNL closed up 1.1 percent at €2.56, in line with BBVA's offer of one new share for every five in BNL.