Of a total €15 billion ($21.7 billion) in available government guarantees, Commerzbank returned €5 billion in August and will return another €5 billion, Blessing said.
"From now on, we won't issue further state-guaranteed bonds," he said during a banking conference in Frankfurt.
Commerzbank is also establishing a new pay scheme for staff based on longer-term profitability, Blessing said, with more executive compensation being paid in the form of shares that would have to be held for longer periods.
The state currently owns 25 percent of Commerzbank owing to financial aid provided to help the bank survive the global financial crisis and acquire the troubled Dresdner Bank.
As a result of the state aid, the salaries of bank executives have been capped at €500,000 per year and its management is tuned into changes Berlin would like to see implemented in the banking sector.
In addition to the loan guarantees, Berlin loaned Commerzbank €18.2 billion in cash. It does not exercise voting rights commensurate with its stake.
Massive bank bonuses and salaries, widely blamed for the culture of irresponsible risk at the heart of the global financial crisis, have shocked Germans who vote in a general election on September 27.
Blessing said Commerzbank bonuses will be placed in separate accounts and paid out several years later than at present, but stressed that staff had never benefited from "excessive" pay packages.
On Tuesday, staff at the former investment bank Dresdner Kleinwort launched a lawsuit in London to recover unpaid bonuses.
Commerzbank bought loss-making Dresdner Bank, the investment bank's parent company, this year and cut drastically the amount of money to be paid out.
Banking pay reform has been added to the agenda of a Group of 20 summit on September 24-25 in the US city of Pittsburgh but Blessing said it would be hard to come up with a general set of rules on the subject.
"I do think that banks have learned some lessons (from the financial crisis) and changed systems but I don't think that's sufficient yet," he added in remarks to reporters on the conference's sidelines.
In the Netherlands, Dutch banks imposed limits on their own bonuses and salaries on Wednesday in what the finance minister there said could be a model for other countries facing public anger over pay ahead of the G20 summit.
Commerzbank shares jumped 13.44 percent to €8.61 in afternoon Frankfurt trading while the DAX index of German blue-chips was 0.99 percent higher overall.