Royal Bank of Scotland is cutting 2,600 jobs in its insurance and UK retail banking operations, adding to 20,000 layoffs, Reuters said.

However, the report did not say if cuts are planned at its private wealth management division. To date, RBS has made it clear it has no plans to shed jobs in this business. It has, in fact, restarted its graduate recruitment programme at its wealth arm, after having closed it temporarily a year ago.

European Union regulators are forcing RBS to sell assets including its insurance arm by 2013, as part of a condition for receiving public funds since the financial crisis. Other banks which have been forced to spin off assets after receiving taxpayer bailouts include Commerzbank, which has sold several wealth management businesses, including the UK-based private bank Kleinwort Benson.

RBS, which is also selling 318 branches as part of the EU's remedy requirements, is cutting 600 jobs from its retail banking head office operations.

The bank, which employs 160,000 people worldwide, said the cuts would take effect over the next year and affect staff at sites across the country. Up to 500 of the insurance back office jobs could go offshore.