Societe Generale SA is pulling back from the U.S. mortgage-bond business just two years after building out the unit, according to two people with knowledge of the matter.

The French bank is instructing traders of U.S. government- backed mortgage bonds to stop buying the securities, said the people, who asked not to be identified because the matter is private. The directive comes as senior executives at the lender discuss scaling back from the $5.4 trillion market, the people said.

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