This would be more than two-thirds of the bank's equity capital, which as a result would fall well below minimum international standards, according to unofficial estimates yesterday.
The governor of the Bank of Spain, Luis Angel Rojo, and Pedro Solbes, the economy minister, will appear before parliament today to explain the dramatic central bank takeover, which included a guarantee of the bank's deposits.
Spaniards from all walks of life were demanding to know why action had not been taken earlier in the face of such large losses.
The crisis severely embarrassed the US investment bank JP Morgan, which was taken by surprise by the rescue and the scale of the losses. With much fanfare, Morgan had led a dollars 1bn three-tranche capital increase in the summer, and as part of the plan made Banesto the first investment of its new Corsair fund for professional investors.
Morgan acted as adviser to Banesto over the capital increase, Spain's largest, and the investment bank's number two, Roberto Mendoza, was recently appointed to the Banesto board that was unceremoniously ousted on Tuesday.
The first two tranches of the capital increase went ahead but the third was recently postponed.
The interim board appointed by the Bank of Spain, including five senior executives of the country's other main high street banks, said it would take at least 30 days to detail Banesto's problems and embark on a restructuring plan.
Mr Rojo and Banesto's new administrators reiterated last night that the central bank would guarantee Banesto deposits, shares and bonds. Branch employees nationwide reported a busy day yesterday but no panic.
'Withdrawals were not substantial,' one teller said. 'Most people came in to seek information.'
A straw poll outside bank branches, however, suggested withdrawals may have been more widespread than staff wished to admit.
The ousted chairman, Mario Conde, who has an estimated personal fortune of around pounds 200m, and the rest of his board remained silent on their demise.
Despite the Bank of Spain's 'guarantees' Banesto's problems could hit many of its ventures, including its high-profile sponsorship of the world's highest-paid cyclist, Miguel Indurain.
The bank, which had divested itself of many, mainly industrial, assets this year in an effort to increase liquidity, may now have to sell off more. It has large holdings in banks in Argentina, Uruguay, Chile and Portugal, and Mr Conde had recently made much of his push to invest in infrastructure in the Palestinian territories expected to become autonomous.
IBCA, the London credit rating agency, put Banesto on rating watch. But the central bank guarantees may mean the credit rating is not reduced.
Rosie Erskine, an analyst at Barclays de Zoete Wedd, did not believe the shares were valueless but said it was difficult to price them until the full extent of the potential losses was confirmed.Reuse content