Profits at French bank Societe Generale nearly quadrupled in the final quarter of last year, thanks to a pick-up in its retail banking and core equities derivatives businesses, it said on Wednesday.

This year has also started well, Deputy Chief Executive Severin Cabannes told Reuters Insider television.

The market situation (between) January and now is slightly better than what we saw in the last quarter ... We can see since the beginning of the year a better trend, he said.

SocGen stuck to a 2012 profit target of 6 billion euros ($8.1 billion) after reporting a 2010 profit of 3.9 billion euros, more than five times its 2009 level, and lifting its dividend payout.

It also said it would not need to raise new capital to maintain its core Tier 1 capital ratio at 8.5 percent, its level at the end of last year, despite the introduction of tougher III banking rules.

The 2012 profit target is a key part of SocGen's turnaround plan under new Chief Executive Frederic Oudea, who has sought to boost investor confidence in the bank after the financial crisis and the Jerome Kerviel rogue trading scandal.

SocGen's shares were up 4 percent at 50.82 euros by 0900 GMT, extending gains of 21.5 percent since the start of the year as investors bet the eurozone has turned a corner and that capital rules under Basel III will be manageable.

No surprises really ... This (Q4 result) justifies the rebound of the stock over the past few months ... The dividend increase is also a good sign, said Francois Chaulet, head of Montsegur Finance.

Cabannes said it was too early to gauge the financial impact from unrest in Egypt after popular protests swept President Hosni Mubarak out of power. The group is seen as among the most exposed international banks to Egypt via its National Societe Generale Bank subsidiary .


SocGen reported a fourth-quarter net profit of 874 million euros, up from 221 million a year ago and in line with market forecasts, which averaged 869 million in a Reuters poll.

The dividend for 2010 was raised to 1.75 euros from 0.25 euros a share in 2009. Banks have been cautious about restoring dividend payouts that were all but wiped out during the financial crisis as they seek to meet the tougher core capital requirements of Basel III.

SocGen's Q4 performance contrasted with that of rivals like Credit Suisse and Goldman Sachs , which suffered more from bond market volatility in a quarter that saw Ireland rescued and debt fears spread to Portugal.

SocGen was not immune to the impact of euro sovereign debt fears, with fixed-income revenue in the fourth quarter slumping 30 percent from the previous three months, but a pick-up in post-crisis market activity saw equity derivatives revenues slightly up.

It was in this part of the bank that Kerviel made risky bets on equity futures prices that led to 5 billion euros in losses that emerged in 2008, putting SocGen on front pages worldwide. Since then the bank says it has tightened its trading controls. Kerviel is appealing a court conviction in the case.

SocGen's fourth-quarter revenue rose 34 percent to 6.9 billion euros, compared with a forecast for 6.5 billion. But loan-loss provisions did not fall by as much as expected, held back by difficult international markets like Greece and Romania.

Group return on equity in the quarter was 8.4 percent, up from 1.5 percent a year earlier. Rivals Barclays and Credit Suisse earlier this week said their profitability was being hit hard by tougher regulations, and Barclays vowed to take action to get its returns back up to 13 percent from just 7.2 percent last year.

($1 = 0.7406 euros)

(Editing by Dan Lalor, Greg Mahlich)