Société Générale has traditionally been France’s “rugby” bank par excellence. For decades it has backed the national team and was the leading sponsor in last year’s Rugby World Cup in France. But while showing polite interest in rugby, Daniel Bouton, the bank’s chief executive, has always been far keener on golf.

He must now be wondering whether his golf ball has landed in a bunker or a lake. As any golfer knows, it is always possible, if not necessarily easy, to chip or drive oneself out of a bunker. It is clearly impossible if the ball ends in the water.

The colossal losses disclosed by SocGen on Thursday have shaken what has until recently been considered a jewel of European banking.

It prompted Mr Bouton to offer his resignation. His board rejected it, and once again appears to be closing ranks to discourage any rival from seizing on the bank’s difficulties to mount a takeover.

SocGen has a history of thwarting hostile advances. In 1988, a year after its privatisation under the rightwing government of Jacques Chirac, it had to fend off a hostile approach orchestrated by Georges Pébereau, the former head of the Compagnie Générale d’Electricité, the dismembered conglomerate that controlled Alcatel and Alstom.

The Socialists had just returned to government. They sought to break down the core shareholding groups friendly to the right that the previous Chirac administration had set up to control the companies it had privatised. They thus tacitly backed Marceau Investissements, Mr Pébereau’s investment vehicle, in its efforts to take control of SocGen. Even the state Caisse des Dépôts backed Mr Pébereau’s bid, but the bank ultimately managed to see off the predators.

Then in 1999, it was caught up again in another epic takeover battle, involving both Paribas and BNP. This time, SocGen launched the hostilities when it made a bid for Paribas. This provoked an instant response from Michel Pébereau – Georges’ younger brother, who had become chief executive of BNP. He launched a bid for both Paribas and SocGen. At the end of the day, and after the intervention of the Banque de France, BNP took over Paribas, but had to let go of SocGen.

BNP-Paribas and SocGen went their different ways, although speculation has regularly surfaced of a revival of the thwarted French banking merger. Mr Pébereau has since said such a combination no longer made much sense given the groups’ big overlap in investment and retail banking. Mr Bouton, too, has kept defending SocGen’s successful standalone model.

That said, Mr Bouton started changing his tune last year when he suggested SocGen might be interested in taking part in banking consolidation. Talks were held with Italy’s UniCredit and whispers were heard that SocGen would no longer be completely averse to combining with its old French rival, BNP-Paribas.

Yet, he also made it clear he was in no hurry to make a transformational merger. But this was before the US subprime crisis and SocGen had considered it would be in the driving seat of any eventual deal.

It is now on the defensive. Its credibility has been hammered and for all its brave language on Thursday, it is clearly vulnerable. The irony is the market meltdown may give it some breathing space to dig itself out of the sand.

Few in the banking community will be laughing at SocGen’s plight. After all, no bank quite knows what skeletons may be hiding in its cupboards as a result of the risks they have been running in the recent boom years. Few, if any, are likely to be rash enough to make a move on SocGen or any other potential target in these very tricky times. If anything, their priority is to reassess all those models that have led to the present crisis.

The problem for SocGen is the strong risk of state intervention. President Nicolas Sarkozy is not amused, especially after reassuring investors of the soundness of the country’s banking system.

Paris could clearly be tempted to orchestrate further consolidation. As a first step, it could send the Caisse des Dépôts to the rescue. It could follow this up by arm-twisting the likes of BNP-Paribas or Crédit Agricole to intervene, either separately or jointly, to split SocGen between them. That would create a new French banking champion, much to Mr Sarkozy’s liking, and keep sovereign wealth funds at bay.

Whether Mr Bouton will survive all the inevitable manoeuvrings around his bank in coming weeks or months is another question.

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