Société Générale is scrapping its financial institutions group (FIG) and transportation M&A teams as part of a strategic review. There is now uncertainty about the fate of around 25 professionals based in London and Paris.

SG's difficulties show that even second- and third-tier banks are being hit by the slowdown. One SG insider said: 'There is plenty of business coming in, but the overheads were becoming too big.' The move raises questions for other second-tier investment banks as to whether they can sustain a presence in their chosen markets, given the slump in activity. Some of SG's rivals have also been hiring and building up overheads, notably BNP Paribas, ABN Amro and Commerzbank. None, however, has so far shown any signs of pain in corporate finance.