Madrid (AFP) - Spanish banks' debt to the European Central Bank plunged further in December, data showed Tuesday, a sign of healthier credit conditions for the bailed-out sector.
Banks turn to the eurozone's central bank for loans when they cannot raise funds affordably on the open debt market, so a decrease in what they owe to the ECB is considered a healthy sign for a country's finance sector.
The ECB debt measure for Spanish banks fell 35.5 percent in December from the same month a year earlier -- a sign that they were finding it easier to raise funds on the market, the central bank said.
The Spanish banks' net debt to the ECB totalled 201.9 billion euros ($276.1 billion) last month, down from 313.1 billion euros in December 2012, the Bank of Spain said.
Spain crawled out of recession in the third quarter, but unemployment remains extremely high and lending to businesses and consumers has yet to recover.
Earlier figures from the central bank showed lending to households declined by four percent in November and loans to business fell by more than eight percent.
The December figure for debt to the ECB was well below the peak of 388.7 billion euros owed in August 2012 but above the 118.9 billion euros owed at the end of 2011.
Spanish banks were almost shut out of international debt markets last year owing to concerns that the country may need a sovereign bailout, forcing them to turn to the ECB.
Concern centred on bank balance sheets, which are loaded with bad loans following the collapse of a property bubble in 2008.
But Spanish borrowing from the ECB has fallen steadily since the euro zone's central bank promised in 2012 to buy the sovereign debt of eurozone countries that officially requested aid.
Madrid secured a rescue loan in June 2012 of up to 100 billion euros from its eurozone partners to underpin Spanish banks.
Spain, the eurozone's fourth-largest economy, used 41.3 billion euros of that loan.
The latest official figures show Spain timidly emerged from a two-year recession with 0.1 percent growth in the third quarter of this year.
Economy Minister Luis de Guindos told parliament on Monday that growth quickened to 0.3 percent in the fourth quarter.
The unemployment rate remains extremely high at nearly 26 percent however.
The government predicts the economy will expand by 0.7 percent in 2014 after shrinking by 1.3 percent in 2013.