MADRID, Feb 18 (Reuters) - Spanish banks' bad loans reached 10.4 percent of their oustanding portfolios in December, down from a record high hit the previous month, data from the Bank of Spain showed on Monday.

Loans that fell into arrears dropped to 167.4 billion euros ($223.5 billion) in December, pushing the bad loan ratio down from 11.4 percent reached in November 2012.

($1 = 0.7490 euros)

(Reporting by Sarah White, Editing by Paul Day) Keywords: SPAIN BAD LOANS/

(sarah.white1@thomsonreuters.com)(+ 34 91 585 2115)(Reuters Messaging: sarah.white.thomsonreuters.com@reuters.net)

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