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FRANKFURT, April 8 (Reuters) - German cooperative lender Apobank has made substantial progress in restructuring after poor investments brought it close to collapse in the financial crisis, and it expects to pass a European bank health check later this year.
"We are not afraid of the stress test," Chief Executive Herbert Pfennig said at the bank's annual news conference on Tuesday. He said Apobank's capital ratio stood at 16 percent at the end of 2013.
Banks have had to increase the amount of capital they hold to back their lending in the wake of the financial crisis when many of them had to be rescued by taxpayers.
The European Banking Authority (EBA), the EU watchdog coordinating bank health checks, wants banks to have a core capital ratio of 8 percent and a ratio of above 5.5 percent during a three-year stressed scenario.
"If we were to enter the stress test with 3 billion euros in structured securities we would not be that relaxed," Pfennig said. "We are glad to have put this behind us. Five years of crisis management is enough."
Apobank, which mainly caters to doctors and pharmacists, is one of the smallest lenders subject to the stress test with a balance sheet total of only 35 billion euros.
In the financial crisis it struggled with 5.5 billion euros of toxic investments, which in the meantime have been reduced to only 200 million, Pfennig said. Apobank had received 640 million euros in guarantees from the umbrella organisation of Germany's cooperative banks in the crisis but did not need to use them.
A German court is due to decide in June if the former board can be held responsible for the investment in toxic assets ahead of the crisis.
Apobank posted a profit of 47.4 million euros in 2013, slightly more than in the prior year. (Reporting by Alexander Hübner; writing by Arno Schuetze; editing by Mark Heinrich)