UPDATE 1-Commerzbank eyes many steps to repay state aid

* Loss-making lender has to pay 18.2 bln eur plus interest

* Wants to reduce risky assets, retain earnings - CEO

* Reiterates capital hike also a possible measure - CEO

* Shares up 0.7 pct, just ahead of bank index .SX7P

(adds details, background)

FRANKFURT, Sept 9 (Reuters) - Germany's second-biggest lender Commerzbank AG (CBKG.DE) will need a variety of measures to pay back the state money it got in the financial crisis, including a potential sale of new shares.

"It will most likely not be one flower but a bouquet," Chief Executive Martin Blessing told Germany's annual Banks in Transition conference.

The measures will include reducing risky assets, retaining earnings as well as possibly raising equity capital, he said.

"At the latest in 2012 we want to begin to pay back the state aid, while respecting the interests of all shareholders," Blessing reiterated.

In addition to buying a 25 percent stake in Commerzbank for 1.8 billion euros ($2.29 billion) during the financial crisis, Berlin took a 16.4 billion euro tranche of non-voting capital -- a so-called silent participation -- to stabilise the bank's capital reserves without becoming majority owner.

Commerzbank's market value amounts to just 7.5 billion euros at current prices.

Chief Financial Officer Eric Strutz said recently that "every day we work to repay the silent participation money more quickly," adding that "this leaves room for speculation that it could be earlier."

A German newspaper reported last month that Commerzbank is planning to raise at least 5 billion euros ($6.4 billion) this autumn, but the bank at the time said there were no concrete plans for such a move, and analysts said they did not expect any quick action by the lender. [ID:nLDE67Q026]

Analysts expect Commerzbank's share price to be burdened for a long time because payment of 9 percent interest on the silent participation limits the lender's ability to retain earnings, pay back state aid and eventually distribute a dividend.

Blessing reiterated that Commerzbank will break even in 2010. (Reporting by Arno Schuetze; Editing by Michael Shields)