The ECB's stress tests will reveal twenty five lenders have failed

The results of the European Central Bank's (ECB) Asset Quality Review (AQR), which are due to be released this Sunday, will show that 25 lenders 'failed', according to a draft 'communique', as reported by Bloomberg.

The final results of the so-called 'stress-tests' may change before they are published, as talks between the monetary authority and the affected institutions take place.

The remaining 105 banks examined will be deemed to have passed with about eleven being expected to be told that they must top up their capital positions in order to meet their regulatory requirements. The latter will be given two weeks to submit their capital plans.

Amongst those banks that will fail are three Greek banks, three Italian ones, two Austrian ones, one Portuguese lender, one Cypriot, one Belgian institution, and no Spanish banks, Spanish newswire EFE reported on Thursday.

Four German lenders, including HSH Nordbank, IKB and Münchener Hypothekenbank, are at risk of failing, a report in Handelsblatt said.

On the subject of UK lenders, in a research note sent on Friday morning RBS's Alberto Gallo wrote that: "Banks with high mortgage exposure are vulnerable, given high household debt, slowdown in the housing market and upcoming rate hikes."