After a weak performance last year, the bank in April unveiled plans to protect profitability, including closing down businesses, cutting 1,600 jobs, selling assets and freeing up to 10 billion euros (£8.6 billion) in capital.

SocGen said its common equity tier one ratio - a measure of a bank's financial strength - rose to 11.7 percent at the end of the first quarter up from 11.2 percent three months earlier.

Analysts had forecast the ratio at 11.3 percent.

"The main achievement is a very strong increase of our capital ratio," CEO Frederic Oudea said in a video released on the bank's website. "It's an important element because it was a question mark for investors," he said.

As part of the restructuring, SocGen announced the sale of its Slovenian bank to Hungarian rival OTP Bank. SocGen said the deal would bolster its balance sheet by reducing its risk-weighted assets by 2.3 billion euros.

SocGen's shares rose by around 2 percent, as analysts focused more on the positives of the stronger capital position, rather than the weak results.

"This performance should close the debate on capital for Societe Generale," wrote brokerage Jefferies, keeping a "hold" rating on the stock.

"Unfortunately, the underlying performance is below our expectations," Jefferies said.

RESTRUCTURING UNDERWAY

Major European banks have found it tough to boost profitability because of low interest rates which have hit returns on retail banking, while investment banking has suffered from market volatility.

SocGen has begun a restructuring, announced in February, which aims to cut 500 million euros in costs in corporate and investment banking after a steep market downturn forced it to lower revenue and profitability targets.

SocGen's first-quarter net profits fell 26 percent to 631 million euros ($705 million), while its revenues fell 1.6 percent to 6.19 billion. Analysts polled by Infront Data expected a net profit of 637 million euros on revenues of 6.07 billion euros.

SocGen said profits from its domestic retail bank fell 13 percent in the first quarter while its corporate and investment banking arm reported a 16 percent profit decline.

SocGen's results contrasted poorly with those of its cross-town rival BNP Paribas, which earlier this week reported higher profits.

SocGen will book between 250 million euros and 300 million euros in restructuring costs this year for the 500 million euros in cost cuts, mainly next year.

(Reporting by Inti Landauro and Matthieu Protard; Editing by Sudip Kar-Gupta and Jane Merriman)

By Inti Landauro and Matthieu Protard