UPDATE 2-France's SocGen flags further cost cuts after derivatives review

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PARIS, June 9 (Reuters) - Societe Generale expects cost cuts to result from a review of its capital markets activities, which suffered in the first quarter, as France’s third-biggest listed bank seeks to improve its profitability after a quarterly loss.

SocGen’s Frederic Oudea, who has been CEO since 2008, is under pressure to restore the valuation of the bank, whose price-to-book (P/B) ratio of 0.24 is lower than that of rivals.

SocGen is one of the biggest players in dividend futures and structured products, but market falls and companies cancelling dividends wiped out its first quarter equity trading revenue.

Although SocGen said it had put structured products under review and limited their production, Oudea said it would not exit the “leading equity structured products franchise”.

“What we are working on is on one hand a change in the range of products to limit the impact if we were to face (a) similar crisis going forward and how we can perhaps reduce the costs,” Oudea said during a teleconference.

“The cost element is absolutely critical”.

The bank said that it was working on other initiatives to accelerate the reduction of group’s operating expenses in the coming years and to improve its cost-income ratio. (Reporting by Maya Nikolaeva; Editing by David Goodman, Edmund Blair and Alexander Smith)