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German bank HSH currently set to pass ECB health check: sources

[October 22, 2014]  FRANKFURT (Reuters) - German public sector lender HSH Nordbank [HSH.UL], seen at risk of failing European Central Bank tests of its financial stability due to its high exposure to the troubled shipping sector, is currently set to pass the exam, three financial sources familiar with the situation said on Wednesday.

HSH was seen as the German lender most likely to fall short in the health checks of European banks being run by the ECB and the European Banking Authority (EBA), the results of which are due to be made public on Sunday.

HSH, which gets the result of its exam on Thursday, was thoroughly checked by regulators and its core capital strength remained above the 5.5 percent minimum needed even in a tough economic crisis simulation that was part of the tests, one of the sources said.

The ECB said it would not comment on individual institutions or speculation.

"Any inferences drawn as to the final outcome of the exercise would be highly speculative until the results are final on Oct. 26," it said in an emailed statement.

HSH declined to comment.

(Reporting by Andreas Kroener, Alexander Huebner and Andreas Framke, writing by Jonathan Gould; editing by Thomas Atkins)

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