Total credit in the financial system was 1.42 trillion euros (1.90 trillion US dollar) in June, up from 1.41 trillion euros a month earlier, data from the Bank of Spain released on Monday showed.
Bad loans dropped to 185.9 billion euros in June from 189.4 billion euros in May, after hitting a record high in January.
Spanish banks forecast bad loans will peak this year as the country pulls out of recession.