MADRID, July 18 (Reuters) - Spanish banks’ bad debts as a percentage of total loans was 13.4 percent in May, holding steady for the second month in a row, as both bad loans and overall lending dropped.
Total credit in the financial system was 1.41 billion euros ($1.91 billion) in May, down from 1.43 billion euros a month earlier, data from the Bank of Spain released on Friday showed.
Bad loans dropped to 189.5 million euros in May from 191.8 million euros in April, after hitting a record high in December.
Spanish banks forecast bad loans will peak this year as the country pulls out of recession. ($1 = 0.7391 Euros) (Reporting by Julien Toyer; Editing by Paul Day)