* 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 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
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
"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
"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
"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
($1 = 0.7412 euros)
(Reporting by Lionel Laurent and Matthias Blamont; Additional
reporting by Katharina Bart in Zurich and Steve Slater in
London; Editing by James Regan and David Evans)