BES capital cushion big enough to deal with potential defaults-source

LISBON, July 10 Thu Jul 10, 2014 1:36pm EDT

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LISBON, July 10 (Reuters) - Banco Espirito Santo (BES) , Portugal's largest listed bank by assets, has sufficiently large capital buffers to deal with potential debt defaults by companies belonging to the bank's founding family, a source familiar with the situation said on Thursday.

"BES' capital cushion allows it to absorb any possible defaults by the Espirito Santo Group without putting at risk the capital ratios demanded," the source told Reuters, adding it was based on information available to regulators that has been audited by KPMG.

Shares in BES plunged 17 percent on Thursday on investor fears that it will be hit by the financial troubles of the Espirito Santo Group - the holding companies of the Espirito Santo family that founded BES.

(Reporting By Sergio Goncalves, writing by Axel Bugge)

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