Spanish banks' bad loan ratio rose again in January

MADRID (Reuters) - Spanish banks' bad loan ratio resumed its rise in January, after a dip the previous month when the government launched a so-called "bad bank" to manage toxic real estate assets.

Bad loans as a proportion of banks' total loan book increased to 10.78 percent in January from 10.44 percent in December, Bank of Spain data showed on Tuesday.

The amount of bad loans increased by 3.2 billion euros (2.7 billion pounds), as a protracted recession continued to take its toll.

The December decline was the first in two years, but otherwise Spanish banks' bad loans ratio has been steadily climbing for months after a 2008 property crash left banks with problem loans and bankrupt clients.

Analysts expect the ratio to continue to climb in 2013. Spain's economy is not expected to grow again until 2014 and unemployment is at a record 26 percent.

Spain's bad bank, known as Sareb, was set up as part of a government drive to restore confidence in the finance industry. It had received over 50 billion euros in toxic real estate assets as of the end of February.

(Reporting by Tracy Rucinski; Editing by Sonya Dowsett and Mark Potter)