Shares in troubled Portuguese lender Banco Espirito Santo tanked 50 percent on Thursday morning, after trading in the stock was suspended until 10 a.m. London time following disappointing earnings.
BES, Portugal's largest listed lender by assets, posted a first-half net loss of 3.58 billion euros ($4.8 billion) on Wednesday evening, wiping out its 2.1 billion euro capital buffer. The bank is likely to have to raise new capital as a result.
Shares in the bank were suspended on Thursday morning by Portugal's stock market regulator.
Turmoil at the group which owns the bank has embroiled the lender for weeks, and former CEO Ricardo Salgado was arrested in connection a tax evasion and money laundering investigation.
This recent flare-up in tensions in Portugal saw its government bond yields spike and heightened concerns that the euro zone debt crisis was on the verge of returning.
BES's common tier one equity ration - a key measure of the bank's financial strength - stands at 5 percent, below the 7 percent required by regulators. The lender's new CEO Vítor Bento said the company would embark on a "comprehensive capitalization plan" including a capital buffer to raise the money needed to meet regulatory requirements.
"While its problems are not new ones, the scale of them has clearly taken the market by surprise," Investec said in a note on Wednesday. BES shares are down 69 percent this month.
The problems at BES began in May when its parent company, Espirito Santo International (ESI), received an audit by the Portugal's central bank which showed "irregularities" in its accounts. The flames were fanned once again on July 10 after debt repayments to clients on commercial paper issued by ESI were delayed.
Shares on Portugal's PSI index slipped 2.4 percent.