* Landesbank Helaba remains in the race (Adds details, background)FRANKFURT, OCT 18 (Reuters) - HSBC on Tuesday said it dropped out of the race to buy WestLB’s corporate lending business after its German unit HSBC Trinkaus & Burkhardt failed to win exclusive negotiation rights.”Despite intensive talks with WestLB’s owners, no agreement for exclusive talks could be reached,” HSBC Trinkaus said in a statement on Tuesday.With the emergence of landesbank Helaba as a rival bidder, and because of delays in the auction process, HSBC sees a limited possibility to clinch the business specialised in lending to small and medium-sized German companies, it said.WestLB Chief Executive Dietrich Voigtlaender said in a separate statement he regretted the fact that HSBC had dropped out of the bidding process.German savings bank association DSGV in early September said Helaba, the Frankfurt-based landesbank, was examining a takeover of what will remain of WestLB after an overhaul.WestLB, once Germany’s third-largest landesbank — owned by the German state of North Rhine-Westphalia (NRW) and local savings banks — is in the process of shrinking its business to a core bank with a balance sheet of 40-45 billion euros ($57-64 billion), known as the “Verbundbank,” that will cater to regional savings banks.The new Verbundbank will be funded and owned by a group of NRW-based savings banks and will have 400 employees — roughly a tenth of the current WestLB staff.WestLB is trying to sell remaining assets such as its corporate lending unit, project financing unit and derivatives business.