Italian bank lending to businesses rose sharply in July, data from the Bank of Italy showed on Friday.

A monthly report on the balance sheets of domestic banks showed loans to non-financial companies increased by 3.7% year-on-year in July, their highest level since June 2021, compared with a 2.6% rise in June.

The data also showed Italian residents' deposits with domestic banks were up to 2.83 trillion euros ($2.86 trillion)from 2.78 trillion euros in the previous month.

Gross unpaid loans ticked up to 35.2 billion euros at the end of July from 35.02 billion euros a month earlier. ($1 = 0.9900 euros) (Reporting by Sara Rossi, editing by Agnieszka Flak)