Commerzbank today presented a plan to repay the majority of state aid by June.

The plan is to pay back €14.3 billion of the €16.2 billion in so-called silent participation, a form of non-voting capital injected by the German government at the height of the financial crisis.

A rights issue will take place between May and June, with a total of €8.25 billion to be raised on capital markets, Germany's second biggest lender said.

In addition, silent participations worth €2.75 billion are to be converted into Commerzbank shares or contributed as part of a rights issue.

"The announcement doesn't come as a surprise but considering that there is now a concrete time frame and things are really getting moving, the share should react well today," trader at Frankfurt's Alpha Trading brokerage said. "The fact that the AGM is being pulled forward also shows that there is a certain urgency which will likely encourage investors," he added.

Earlier this month, Reuters said Commerzbank is putting the finishing touches on a "big bang" plan for repaying state bailout money.

From April onwards Commerzbank plans to place conditional mandatory exchangeable notes, which will be converted into shares, Commerzbank said.

German state bailout fund Soffin injected €16.4 billion of so-called "silent participations", a form of non-voting capital contribution, and a further €2 billion in exchange for a 25 per cent stake in Commerzbank during the financial crisis.

Chief executive Martin Blessing had said earlier this year that Commerzbank was planning to repay a sum running into the billions this year, while maintaining a "healthy" equity ratio.

Germany's second biggest lender has said its repayment plan will include raising capital, retaining profits and using unneeded capital reserves that are freed up as Commerzbank reduces risky assets.

Once it starts paying interest on bailout money, Commerzbank will be allowed to lift pay limits on top bankers.

Reuters