Italian residents' deposits with domestic banks kept on falling in August albeit at a slower pace while domestic lenders further increased their bond issuance, Bank of Italy data showed on Tuesday, as savers look for higher returns.

Residents' deposits with domestic banks decreased on an annual basis by 5.4% in August after a 6.5% fall in July.

On a monthly basis, deposits in euros fell to 2.42 trillion euros ($2.61 trillion) from 2.43 trillion euros in July. (Reporting by Sara Rossi, editing by Francesca Piscioneri)