Spanish banks' bad debt jumps in July

MADRID, Sep 18 (Reuters) - Spanish banks' non-performing loans ratio jumped to 2.14 percent in July from 1.6 percent in June, due largely to the default of property company Martinsa-Fadesa (MFAD.MC), Bank of Spain data showed on Thursday.

Bad debts totalled 38 billion euros, up 9.6 billion euros on the month, with roughly two-thirds accounted for by Martinsa-Fadesa, which became the largest insolvency in Spanish history in July.

Bad debts have tripled in the past year as property companies have folded and householders struggle with mortgage payments due to the collapse of a decade-long property boom and a sharp economic slowdown.

The non-performing loan ratio among largely unlisted savings banks, with 870 billion euros in credit, reached 2.5 percent. Other banks, with 800 billion euros in loans, had an NPL ratio of 1.74 percent.

Spain's government sayš Spanish banks are well-placed to withstand the upheaval in world financial markets, with good levels of provisions and profitability. (Reporting by Andres Gonzalez, editing by Mike Peacock)