UPDATE: 6:53 a.m. EST — Shares of Societe Generale SA slumped as much as 13 percent in early trading on the Euronext Paris Exchange, amid a broader sell-off in the banking sector Thursday, while the overall index was down about 3.2 percent. The company’s stock has lost nearly a third of its value since the beginning of the year.

Original story:

Societe Generale SA, France’s second-largest bank by market value, posted lower-than-expected profit for the fourth quarter Thursday, citing falling demand for its investment banking services and potential legal bills. The company also indicated that it was uncertain about hitting its earlier target of a 10 percent profitability margin by the end of the year because of “headwinds” that include record-low interest rates and volatile financial markets.

SocGen's Net income for the quarter rose to 656 million euros ($741 million) from 549 million euros ($619.7 million) a year earlier, the Paris-based company said in its earnings press release. Profits fell well short of the 944 million euro ($1.06 billion) mark that analysts, polled by Bloomberg, had projected. According to SocGen, earnings were affected by a 400 million-euro ($451.8 million) litigation charge, along with revenue declines in global markets, and its global banking and investor services unit that includes private banking business.

With regulators tightening scrutiny of risky financial activities and markets in turmoil at the start of the year, many large European banks have posted losses or seen sharp declines at their investment banking units in the December quarter.

Swiss banking giants Credit Suisse and UBS, along with Germany’s Deutsche Bank, have resorted to sweeping job cuts in a bid to prop up profits in the face of a global slowdown and dwindling returns. While SocGen announced cost-cutting measures last year, it refrained from the deeper cuts in its investment banking services to boost profitability, Bloomberg reported.

SocGen registered a profitability margin, also known as Return on Equity (ROE), of 8.1 percent by the end of 2015, up from 7.3 percent in 2014. However, the company said Thursday that due to “the increase in capital requirements and the economic and financial environment” it was not possible to confirm its 2014 ROE target of 10 percent by the end of 2016.

The company set aside a hefty 400 million euros to cover potential legal costs as it conducts an internal investigation into dollar transfers made through the bank on behalf of entities based in countries which face U.S. sanctions. According to the French bank, its total litigation provisions stood at 1.7 billion euros ($1.92 billion) at the end of 2015.