MUNICH, GERMANY - German Landesbank Bayern LB needs less state aid and is negotiating with the bank rescue fund SoFFin about returning 10 billion euros, a source close to the company said on Saturday.

At the end of 2008, SoFFin had granted 15 billion euros in guarantees for the bank, of which 5 billion euros was used by BayernLB.

Since BayernLB was able to raise 1 billion euros on the capital markets at the beginning of the month, market confidence has returned to the bank, the source at the bank said.

Reports about BayernLB returning 10 billion in aid first appeared in an advance copy of German daily Sueddeutsche Zeitung.