July 23, 2014 / 4:05 PM / in 4 years

CORRECTED-Panama regulators take over Espirito Santo Financial Group unit

(In July 18 story, corrects name of ES Bank SA owner to Espirito Santo Financial Group from Banco Espirito Santo)

PANAMA CITY, July 18 (Reuters) - Panamanian banking supervisors said on Friday they had taken control of ES Bank SA, a small unit of Espirito Santo Financial Group (ESFG).

Panamanian regulators took over ESFG’s Panamanian unit to “protect and defend the interests of depositors and creditors of the institution, given the lack of liquidity and potential insolvency,” they said in a statement.

ESFG has about a 20 percent stake in Banco Espirito Santo , Portugal’s largest-listed lender, which is under investigation after disclosing financial irregularities at firms owned by the Espirito Santo family, the bank’s largest shareholder that have raised the possibility of destabilizing losses at the bank, too.

The takeover of ES bank, which was granted a foreign license in 2001, will last 30 days and will not affect the Panamanian financial system, regulators added.

Reuters was not immediately able to reach ES Bank, which had listed assets of $793 million and liabilities of $711 million, according to a December 2013 financial statement posted on its website. (Reporting by Eli Moreno, Writing by Alexandra Alper; Editing by Ken Wills)

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