INTERVIEW-UPDATE 1-Commerzbank saw business improving in Q2

* Business segments mixed, improvement in corporates, retail

* Structured credit products still volatile

* Bank has no need for more government help or bad bank plan

* Shares widen gains, up 2.5 percent, outpace sector

(Adds detail, background, shares)

By Patricia Uhlig

BERLIN, July 10 (Reuters) - Commerzbank (CBKG.DE) saw losses narrow in the second quarter versus the first as business with medium-sized companies and retail clients achieved good results, a Commerzbank board member told Reuters in an interview.

"The trend in the second quarter was better than in the first," said Markus Beumer, responsible for Commerzbank's business with the small and medium-sized "Mittelstand" companies that form the backbone of the German economy.

Germany's second-largest bank racked up a worse-than-expected 861 million euro ($1.20 billion) net loss in the first three months of the year, weighed down by charges and writedowns of over 2.6 billion euros, and some analysts have predicted that the loss would widen in the second quarter.

Developments were mixed for individual business segments in the second quarter, he said

"In the Mittelstand and retail banking segments, we've again achieved a good result, but we still have a lot of volatility in structured credit products," Beumer said.

Commerzbank continues to expect bad loans of around 3.5 billion euros this year, most of which will fall in the second half of the year, Beumer said, adding that the medium-sized business and retail client segments are expected to post an operating profit this year.

The lender has no need of further capital support from the German government and saw no need to make use of Berlin's "bad bank" scheme to help banks unload toxic assets, Beumer said.

"We are sufficiently capitalised and stress tests show it," Beumer said.

Commerzbank has already received 18.2 billion euros in support from the government's bank rescue programme in a deal that gave Berlin a stake of 25 percent plus one share in the lender.