Commerzbank is to give back €5bn of unused government guarantees for its borrowing in a sign that financial market conditions are returning to normal for Germany’s second-biggest bank.

Commerzbank was one of many European banks to be given state guarantees, at a price, to help it refinance itself when trust in financial institutions virtually disappeared after Lehman Brothers’ collapse last September.

Martin Blessing, chief executive, said: 'We think the market is now in a state that we can do without these guarantees the whole funding situation has eased considerably.'

Financial Times