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PARIS, Aug 1 (Reuters) - Societe Generale, France's third-largest bank in terms of market capitalization, posted lower second quarter net profits after earnings were impacted by restructuring costs at its corporate and investment banking unit.
Net profit fell 14% to 1.05 billion euros ($1.16 billion)during the second quarter compared with the same period a year ago, with revenues down 2.6% to 6.28 billion euros.
UBS, Credit Suisse and Jefferies respectively expected net profit of 928 million euros, 833 million euros and 1.08 billion euros.
Societe Generale booked a 227 million euro charge related to its plan to restructure its corporate and banking unit by reducing 500 million euros worth of costs and cutting 1,600 jobs after a dismal fourth quarter.
SocGen's results were weaker than those of its larger domestic rival BNP Paribas, which this week reported a forecast-beating second quarter net profit of 2.5 billion euros.
Despite the lower profit in the quarter, Societe Generale managed to raise its common equity tier 1 ratio to 12% from 11.5%, thanks to asset disposals and the payment of parts of its dividends in shares instead of cash.
The bank had set a 2020 target of 12% for its capital ratio.
"This was the priority. At the beginning of the year, some of our investors could wonder whether we would need to seek capital," SocGen's Chief Executive Frederic Oudea said in an interview with French radio station BFM.
SocGen's shares are down about 20% so far in 2019, and have underperformed the broader stock market.
Nevertheless, Jefferies' analysts Maxence Le Gouvello Du Timat and Martina Matouskova said in a research note that the bank's second quarter results were higher than expected. "Great achievement on capital and underlying is better than expected. We expect the stock to outperform the sector," they said. After years of low interest rates curtailed returns for retail banking, SocGen, BNP Paribas and other big European banks have grown more reliant on more volatile earnings from corporate and investment banking.
A few quarters of difficult environment for corporate and investment banking have spurred banks like SocGen and cross-town rival BNP Paribas to carry out restructuring plans and close some unprofitable businesses such as proprietary trading.
($1 = 0.9053 euros) (Reporting by Inti Landauro and Matthieu Protard)