Another shoe hit the floor today in the Portuguese banking sector, and this one landed with a loud thud. On Wednesday, July 30th, Portugal’s Banco Espirito Santo SA (ELI:BES), the country’s second largest bank, reported a shocking €3.49 billion ($4.68 billion) net loss for the second quarter, and disclosed that its parent had used the bank to raise funds that will be difficult or impossible to collect.

Banco Espirito Santo SA

The Portuguese stock market regulator suspended trading in Banco Espirito Santo SA (ELI:BES) shares for two hours on Thursday morning, but the stock was down almost 50% within minutes when trading resumed.

Banco Espirito Santo’s recapitalization plan

The belabored bank is also being required to raise capital as the huge losses have reduced its Tier 1 common equity ratio below the 7% required by European regulators.

“Over the course of the past few weeks, both shareholders and potential investors have shown interest in participating in a capitalization plan, some of them willing to take relevant stakes in the bank,” Banco Espirito Santo SA (ELI:BES) CEO Vitor Bento said Wednesday in a press conference, and added that the recapitalization process “will be initiated immediately.”

Bento also mentioned the bank might also sell assets to raise funds. The new CEO also told the media that his team has found “questionable practices” within the bank that led to the giant loss, continuing to say that “such indication will be duly investigated and, if applicable, communicated to the competent authorities for legal purposes.”

The Bank of Portugal also said separately on Wednesday said an ongoing audit “will help evaluate responsibilities of individuals, including the previous chief executive officer, chief financial officer and other members of the management team who have left their posts.”

Banco Espirito Santo SA (ELI:BES) shares are trading down .12 at .227 euros as of 9:20 PM ET. That represents a loss of close to 35%.

No word on what Baupost Group’s plan is at this point.