MILAN - The number of bank branches in Italy is set to shrink to around 16,000 in 2029 from 22,000 last year, consultancy Deloitte said on Wednesday, as customers increasingly embrace digital banking.

In a report on banks' digital progress, Deloitte forecast online banking would reach a penetration of 60% in Italy over the next seven years, from 45% in 2022.

The company ranks lenders on a scale ranging from 'digital latecomers' to 'digital champions', based on its Digital Banking Maturity (DBM) score.

Overall, Italian banks' DBM improved from the previous ranking in 2018 with two lenders, whose identity was not disclosed, classed as digital champions.

Deloitte said this was thanks to a wide range of digital services which clients deem relevant and a better than peers' digital experience for users.

"Digital champions ... also have a better financial performance, with an increase in return on equity of 1.5 percentage points versus other players," Deloitte's Digital Senior Partner Manuel Pincetti said.

  - Reuters