Societe Generale
An employee enters the headquarters of French bank Societe Generale, the country's second largest, at La Defense, west of Paris. Reuters

French bank Societe Generale's net profit halved in the first quarter due primarily to accounting charges related to the bank's debt.

Group net income declined 50% to €364m ($476m, £307m) as income from banking operations declined by 19% to €5.09bn.

The second-biggest bank in France also booked €1.05bn charge related to the revaluation of its own debt.

Following the weak results, the bank plans to cut its annual costs by €900m by the end of 2015, which would raise SocGen's return on equity to 10% from 7.4% in the first quarter.

The move would cost €600m for the bank and is expected involve further job cuts, after 1,600 layoffs last year.

The bank has undertaken a cost-cutting initiative over a year ago to simplify its operations. So far, it could save €550m in costs as part of the plan.

The bank's core tier 1 ratio, a measure of top-quality capital such as equity and retained earnings, stood at 8.7% at the end of the first quarter. SocGen forecast that the ratio would reach close to 9.5% by year end.

Net income at SocGen's corporate and investment banking division rose 41% to €494m, while the same dropped 22% to €256m at the consumer-banking business. Profit at its international branch networks, including Russia, Romania and the Czech Republic, increased 76% to €79m.

In line with the recession in the eurozone and new rules to reduce banks' risky assets, SocGen has sold its subsidiaries in Greece and Egypt. The lender booked a €377m gain in the first quarter from the sale of the Egyptian business.

Among SocGen's rivals, BNP Paribas, France's largest listed bank by assets, earlier recorded a 45% decline in first-quarter net profit to €1.58bn on lower revenue and higher bad loan provisions. Credit Agricole, however, reported a 51% jump in first-quarter net profit to €469m.