The decision was announced today and cuts will take place over the next three years both in the UK and abroad.

The RBS wholesale business will be split into ‘Markets’ and ‘International Banking’ in an effort to scale down the firm’s existing activities.

‘Markets’ will focus on fixed income, risk management, debt capital raising, securitisation and foreign exchange.

‘International Banking’ will be a merger between the corporate banking division and the Global Transaction Services and will focus on debt financing, risk management and payment services.

RBS will also sell off or close its cash equities, corporate broking, equity capital markets and mergers and acquisitions businesses which are ‘currently unprofitable’.

Group chief executive Stephen Hester said: “For our strategy to be effective, it must adjust to fresh challenges. And it is clear that, particularly in the wholesale banking arena, significant new pressures have emerged.

“The changes we are announcing today seek to ensure that RBS is at the front of the pack in pursuing a strategy that reflects the environment we expect to operate in.”

Further details will be given at the firm’s full year results which will be released on 23 February.