Bad loans held by Spanish banks declined for the first time since May 2011 in December last year, new official data has shown.
Figures collated by the Bank of Spain (BoS) revealed that the bad loan ratio of financiers from the struggling eurozone member state fell to 10.44 per cent during the final month of 2012.
This means the ratio ended its run of 17 consecutive monthly increases and the downward movement also represents a drop of around one per cent from the record high point of 11.4 per cent recorded in November.
Overall, bad loans fell by €24.1 billion ($32.2 billion) to €167.4 billion over the course of the months and the BoS attributed the decline mainly to the impact of Spain's bad bank Sareb.
As of 31 December, four of the nation's most indebted institutions - Catalunya Banc, Bankia, Banco de Valencia and Novagalicia Banco - transferred their toxic assets to Sareb, meaning their balance sheets now look substantially more healthy.
By Gary Cooper