By Inti Landauro and Matthieu Protard
PARIS (Reuters) - France's Societe Generale cut its profitability target after it was hit by a fourth quarter market downturn, joining other European banks battling a tough climate.
The country's third largest listed bank expects its return on tangible equity to be between 9 and 10 percent in 2020, down from a previous target of 11.5 percent.
Societe Generale also said it would not meet its 3 percent revenue growth target after revenue fell 6.3 percent in the fourth quarter to 5.93 billion euros ($6.7 billion), in line with analyst forecasts collected by Infront Data.
The bank issued a profit warning three weeks ago, hitting its shares. The stock was down 0.9 percent in early trading, although some analysts and traders said its results were not as bad as feared.
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"SocGen has almost an 8 percent dividend yield. I like and own the sector after a 20 percent fall in 2017," said Ion-Marc Valahu, a fund manager at Geneva-based firm Clairinvest.
Brokerage Jefferies also wrote in a note that SocGen's results showed a "better mix than expected."
SocGen's corporate and investment banking unit saw its profit fall by more than half during the quarter.
"In a rough environment, most notably at the end of last year, the performance of our market activities was disappointing," SocGen's Chief Executive Frederic Oudea said.
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Big European banks are struggling to find new profit sources after years of rock-bottom interest rates have limited returns in retail banking, while corporate and investment banking is vulnerable to market swings.
SocGen's rival BNP Paribas this week also cut its financial targets after reporting its first loss on market activities since the financial crisis.
Deutsche Bank also posted a bigger-than-expected quarterly loss at its investment bank last week.
Following the dismal performance of its market activities, Societe Generale - like BNP Paribas- has decided to cut 500 million euros in costs at its corporate and investment banking arm.
SocGen will also sell or close down some of businesses and has already closed its proprietary trading desk in Hong Kong.
It also replaced Frank Drouet, the head of market activities with deputy chief risk officer Jean-Francois Gregoire.
SocGen's CEO also said the macroeconomic outlook has become more challenging for his bank in the past quarter with geopolitical uncertainties, a economic slowdown in the eurozone and lower expected interest rates all having an impact.
In order to protect its profitability, the bank will intensify its plan to dispose assets. SocGen now targets selling units handling a total of 6 percent to 7 percent of its total assets, up from 5 percent until now.
SocGen has sold banks in Belgium, Bulgaria, Serbia, Moldova and South Africa over the past few months. The bank still intends to sell divisions that lack critical size on their markets and do not allow synergies with the rest of the group.
($1 = 0.8799 euros)
(Reporting by Inti Landauro and Matthieu Protard; Editing by Alexander Smith; Editing by Sudip Kar-Gupta)
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