Societe Generale dismissed a report in French newspaper Liberation of a new financial scandal at the bank, saying the article had been based on a misunderstanding of its accounts.

Liberation's front-page report said 5 billion euros ($6.6 billion) had disappeared at the bank and added this amount could go up to 10 billion. But SocGen said Liberation had mistaken the amount of assets transferred in 2008 from the company's SGAM investment subsidiary to the parent group.

SocGen executive Jean-Pierre Mustier told Reuters that out of a portfolio of 11.2 billion euros worth of assets that had become illiquid as a result of the credit crisis, 4.8 billion euros had either been sold off or had reached maturity.

Mustier added there was no pressure to sell the remaining assets at the bank's SGAM Alternative Investments unit.

SocGen reports first-quarter results on May 7. On March 31, the bank said it expected extra writedowns for the first quarter but added that these would be at a manageable level.

SocGen and Credit Agricole said in January they had agreed to merge their asset management units. SGAM Alternative Investments was not part of that deal and is instead being merged with SocGen's Lyxor fund management unit.

While this internal merger is expected to lead to job cuts, Mustier said there would be no forced redundancies and added Lyxor remained a core part of SocGen's business.

Lyxor, once merged with SGAM AI, will remain a key business for Societe Generale, Mustier said in a telephone interview.

The media report caused SocGen shares to close down 3.7 percent at 36.96 euros, underperforming a 0.1 percent fall in the broader DJ Stoxx European bank sector <.SX7P>.

Rival French banks BNP Paribas and Credit Agricole fell 0.4 and 2.4 percent respectively.

However, French broker CM-CIC Securities said the Liberation report was exaggerated.

SocGen has borne the brunt of a wave of negative newspaper articles in the wake of last year's rogue trading scandal involving former employee Jerome Kerviel.

Last month its top managers gave up stock options following a public outcry, led by President Nicolas Sarkozy, over the fact that money received from the French state to help it through the financial crisis could be used to remunerate executives.

(Additional reporting by Matthieu Protard and Pascale Denis; Editing by Diane Craft and David Holmes)

($1=.7611 Euro)

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