The bad debt of Spanish banks fell to 10.39 percent in February from the 10.78 percent registered in January due to transfers of toxic assets to the Spanish "bad bank" (SAREB), the Bank of Spain reported on Thursday.

The Bank of Spain said bad debt in the Spanish banking system decreased due to transfers made from the non-nationalized banks Spanish banks whichalso need public financial assistance to the Spanish "bad bank" (SAREB): Banco Ceiss, Liberbank, BMN and Caja 3.

The SAREB was created to absorb toxic assets from the Spanish banks as a condition of the EU bailout for Spain's banking system.

Thursday also saw the Bank of Spain publish data about the country's public debt which stood at 86.9 percent of Spain's gross domestic product (GDP) in February, equal to 913.6 billion euros (1,196.8 billion U.S. dollars), the highest figure since 1990.

The bank said the public debt increased by 19.6 percent year on year.

The Spanish government predicted Spain's public debt will stand at 90.5 percent in 2013. (1 euro = 1.31 U.S. dollars) Endi

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