Banco Espirito Santo International, the bank’s ultimate parent company, filed for protection late on Friday after it revealed it could no longer meets its obligations.
Retail investors had bought about €255m (£201.8m) worth of debt from the parent company but the bank said yesterday that the investors would be protected from losing their money.
“The bank, through its commercial network, will proactively contact clients,” it said in a statement released to the Wall Street Journal.
Banco Espirito Santos is owned by the Espirito Santo family through a complex structure.
The family own Luxembourg-based Espirito Santo International, which owns a further holding company called Rioforte.
RioForte in turn owns about 50 per cent Espirito Santo Financial Group, which owns 20 per cent of the high street lender Banco Espirito Santo.
Retail investors own about €342m of debt from Rioforte, although this entity has not yet filed for creditor protection despite mounting speculation it will see to do so.
The Espirito Santo International holding company plunged the bank into crisis after an external audit found the group in a “serious financial condition” due to “irregularities”.
Shares in the Banco Espirito Santos were subsequently hit due to fears over the financial stability of the bank’s holding company, sparking panic in Portuguese financial markets.
On Friday Portuguese central bank governor Carlos Costa said early contracts had been made between Banco Espirito Santo and investment banks to strengthen the banks’s balance sheet. The group had earlier undergone a capital raising programme during which time the problems were exposed, which raised €1bn from investors.