In a surprise move the former chairman and chief executive for Royal Bank of Scotland's China business, is joining US investment bank Jefferies & Co.

Sherry Liu resigned at the beginning of August from the British lender, after working there for 16 months, confirmed a spokesperson. She joined RBS from JP Morgan's China business where she was vice chairman.

RBS said it had replaced Liu with Alex Chu, the head of international banking for North Asia, who has also assumed the role of chair of the board of RBS China.

RBS, which is 82 per cent-owned by the UK taxpayer, has been making major cutbacks, including laying off 5,000 investment banking staff globally, since the start of the year. This year it sold its Asia-Pacific equity capital markets business to Malaysian bank CIMB, to save costs. It has in particular been making heavy cuts in its retail equity and institutional sales businesses in recent months, say sources.

Liu, who has been described as a "star banker", has joined US investment bank Jefferies & Co in a senior role in its investment banking business, to drive the firm's expansion in Asia, according to a source close to the situation. 

She is said to be joining the firm next week.  

Jefferies was involved in two iconic initial public offerings in the US this year, the flotations of Facebook and British football team Manchester United. 

Jefferies declined to comment.