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Portugal mulls use of state funds to complement BES hike -sources
August 1, 2014 / 3:12 PM / 3 years ago

Portugal mulls use of state funds to complement BES hike -sources

LISBON, Aug 1 (Reuters) - Portugal’s authorities are considering the use of public funds to shore up Banco Espirito Santo’s capital, complementing a cash call from investors, people close to the process said on Friday.

One source said BES will likely need 3 billion euros ($4 billion) after a catastrophic 3.6 billion euro loss posted on Wednesday wiped out its capital buffers and reduced its solvency ratio below that required by the Bank of Portugal.

Following the bigger than expected losses it may be hard to avoid a “mixed solution” of using private capital and public funds to recapitalise the country’s largest listed bank, two sources said. ($1 = 0.7445 Euros) (Reporting By Sergio Goncalves, writing by Andrei Khalip)

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