* Targets 40 pct dividend ratio, asset sales over -CEO Oudea
* Swings to Q4 profit after lower one-off charges
* Bonus pool to fall year-on-year after Euribor fine -CEO
By Lionel Laurent and Matthias Blamont
PARIS, Feb 12 (Reuters) - Societe Generale is toreturn more cash to shareholders in 2014 than last year aftercompleting a long-running overhaul of its balance sheet.
France's No. 2 listed bank has sold assets, cut jobs andpulled out of markets like Greece and Egypt to meet tough newrules to strengthen European banks after the financial crisisand the euro zone's debt troubles.
The bank is aiming for a dividend payout ratio of 40 percentin 2014, up from 27 percent in 2013, SocGen's chief executiveFrederic Oudea told Reuters Insider television on Wednesday.
"We have accomplished the transformation of the balancesheet at year-end 2013," Oudea said, adding the bank was able toincrease operating income, to benefit from a reduction inloan-loss provisions and to use capital more effectively.
The bank, which reported 2013 results on Wednesday, had acore Tier 1 capital ratio of 10 percent at end-December undertough new global rules, ahead of some rivals like Deutsche Bank.
While SocGen's dividends are on the increase, its bonus poolwill be down for 2013, Oudea said, after a 445.9 million eurofine over attempted rigging of the Euribor benchmark rate wipedout investment banking profits in the quarter.
Oudea said SocGen had learned its lesson from the crisis.
SocGen's bonus policy contrasts with UK bank Barclays, which hiked bonuses for bankers at the same time ascutting 12,000 jobs, angering politicians.
Oudea said SocGen might consider "small" acquisitions in themould of the derivatives-focused broker Newedge it agreed totake over last year.
SocGen shares rose 5.8 percent to their highest level sinceMay 2011, with investors and analysts pointing to the dividendoutlook.
"The results are reassuring but the key point is theincrease in the dividend payout," said Yohan Salleron, fundmanager at Mandarine Gestion, who does not own SocGen shares."This is a trend that will start to be seen across the bankingsector."
Other banks have already pledged higher dividends, includingHandelsbanken and SEB in Sweden, NationalBank of Canada and UBS in Switzerland.
NET PROFIT ALMOST TRIPLES
SocGen reported a fourth-quarter net profit of 322 millioneuros ($440 million) on Wednesday, compared with a 471 millionloss for the same period in 2012. Loan-loss provisions were downby 20 percent, while writedowns on the acquisition value ofassets were cut by almost 90 percent.
But there was a push in the quarter to increase provisioningagainst non-performing loans in markets like Russia and Romania. JPMorgan analyst Delphine Lee said this was a welcome signahead of a health check by the European Central Bank.
Stripping out one-off costs and losses on toxic assets,SocGen's fourth-quarter net income would have been 928 millioneuros, the bank said, thanks to profit growth from retailbanking in France and abroad as well as corporate finance.
That compared with quarterly analyst expectations for afigure closer to 623.3 million euros, according to the meanaverage of analyst forecasts compiled by Thomson Reuters Eikon.
"There's nothing not to like in SocGen," Toby Campbell-Gray,head of trading at Tavira Securities, said.
SocGen's 2013 net profit almost tripled to 2.18 billioneuros from 790 million euros a year earlier. The bank proposed a2013 dividend of 1 euro per share, up from 0.45 euros in 2012.
Other banks are also bouncing back from the crisis. Dutchbank ING reported a 22 percent increase in underlyingnet profit for 2013 on Wednesday.
SocGen has launched a new cost-cutting drive to meet anend-2015 10 percent return-on-equity target, versus anunderlying ROE of 8.4 percent in 2013. The bank secured 350million euros in recurring cost savings in 2013, part of whichwill come from hundreds of job cuts.
Rivals including Deutsche Bank and UBS are targeting ROEs -a measure of profitability - in 2015-2016 of 12 to 15 percent.SocGen's Oudea said there was no plan to increase his target.
Barclays (BARC)