Job cuts would more than half the size of its investment banking division
The cuts would represent more than half of the bank's 19,000 staff in its global banking and markets division and are more than double the number previously rumoured.
It was reported yesterday RBS has appointed Lazards to find a buyer for its stockbroking subsidiary Hoare Govett as well as its substantial US and Australian equities divisions.
The Financial Times cites "a person familiar with the banks plan" suggesting RBS is planning an exit from the cash equities business and a number of other investment operations, including equity derivatives.
Today's report of the investment banking division being cut by more than half may also see RBS scale back its European investment banking operations.
RBS is said to be looking to withdraw its investment banking operations in Spain, Russia, Italy and the Nordic regions in order to focus on its operations in London, Frankfurt and Paris.
The bank's own head of risk in the Netherlands, Jeroen Kremers, has also said publicly he fears the eurozone will fall apart.
Kremers told the Financieele Dagblad, in an interview published today, policy makers are trying to protect national interests rather than trying to save the single currency.
Chancellor George Osborne warned RBS last month it had to reduce its overall risk exposure.
RBS chief executive Stephen Hester has indicated a willingness to scale back the bank's investment arm in response to the continued downturn in Europe and new regulatory capital requirements.
Restructuring of the investment banking division of the 83 per cent taxpayer-owned bank could cost between s1billion and s2 billion, the Financial Times reports.
However the cost outlay of the restructuring is said to be a "worst case scenario" in the event RBS fails to offload the investment banking divisions it has already earmarked for disposal.