UPDATE 1-SocGen CEO defends 2015 profit target
* CEO confident bank will deliver on its 10 pct ROE target
* Sees no need to review overall strategy in Russia
* SocGen has cut toxic assets by 600 mln euros since June (Adds CEO comments)
By Lionel Laurent and Matthias Blamont
PARIS, Sept 25 (Reuters) - European banks promising return on equity (ROE) of around 15 percent in two years may face challenges hitting this target given the tough outlook, Societe Generale's chief executive said on Wednesday.
France's No. 2 listed bank has set itself an ROE goal of 10 percent by 2015, while rival banks including Switzerland's UBS and Britain's HSBC are aiming for at least 15 percent.
SocGen is in the early stages of a drive to cut 900 million euros ($1.21 billion) in costs by 2015, as lenders across Europe set out new strategies to offset the impact of tougher post-crisis rules on risk-taking and the drag of weak euro zone growth.
"In the kind of environment we are in, I have some doubt that a lot of banks will do that well (and reach) 15 percent return on equity, after tax, in two years' time," SocGen CEO Frederic Oudea told a Merrill Lynch investor conference in London.
"My view is, if we can achieve this (10 percent), it's a very good basis on which we can further build."
UBS declined to comment, while HSBC was not immediately available to comment.
SocGen, which along with other French banks has enjoyed a share-price rebound over the past 12 months after a drive to sell assets and cut risk, is betting on growth at its Eastern Europe subsidiaries in Russia and Romania to lift profits.
Although SocGen's Russian Rosbank brand has shown little in the way of returns after a lengthy restructuring, Oudea said there was no need to review the bank's strategy, adding: "It's a question of execution."
The French bank is also improving its balance-sheet robustness by selling down its pile of toxic assets left over from the 2008 financial crisis. This portfolio has been cut by 600 million euros to 1.2 billion since June, Oudea said.
Asked whether the environment had improved enough to warrant cutting back on costly liquidity reserves, Oudea said the bank had already started to reduce its liquidity buffer and cited central-bank deposits.
"When I see the development of deposits (at SocGen) ... It makes no sense to have so much," he said.
The CEO's presentation also said that the bank had already met its long-term funding needs for 2013, with 21.4 billion euros raised from primarily unsecured issuance and private placements.
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