MADRID, Sept 18 (Reuters) - Spanish banks' bad debts as a percentage of total loans was 13.2 percent in July, barely changed from 13.1 percent a month earlier, as bad loans and overall lending fell.
Total credit in the financial system was 1.40 trillion euros ($1.80 trillion) in July, down from 1.42 trillion euros a month earlier, data from the Bank of Spain released on Thursday showed.
Bad loans dropped to 184.5 billion euros in July from 186.2 billion euros in June, after hitting a record high in January.
Spanish banks forecast bad loans will peak this year as the country pulls out of recession. (1 US dollar = 0.7763 euro) (Reporting by Julien Toyer; Writing by Paul Day; Editing by Sonya Dowsett)