Royal Bank of Scotland is selling a large wealth management business, one which predominantly serves affluent rather than high net worth clients, to Banco Santander as well as carrying out a sale of 318 branches to the Spanish bank, the Wall Street Journal reported.

WealthBriefing also heard of industry rumours over the weekend that such a sale was on the cards. RBS had not, however, commented to this publication about the matter at the time of going to press.

The moves are part of a strategy by RBS – 83 per cent owned by the taxpayer – to offload some business units to cut costs and increase profitability. Last week, the UK-listed bank said that its wealth management arm, which includes its flagship Coutts business, saw operating profits rise to £321 million (around $503 million) in 2011 from £304 million a year before.

Santander agreed to pay a £350 million premium to buy the RBS branches in August 2010. However, the purchase also comes with an RBS wealth advisory franchise in England and Wales, a fact that has hitherto not been public knowledge, the WSJ said.

The publication said RBS confirmed that 84,000 of the bank's wealthy clients served by 400 staff from three branches had been included in the package. The staff will be absorbed into Santander Private Banking, which manages client assets worth £90 billion across the world and employs 2,000 staff.

The RBS wealth business principally caters to affluent investors, as opposed to multimillionaires who will still be served by Coutts.

RBS-owned NatWest will retain its affluent accounts, apart from Scotland, which is part of the Santander package.

RBS will not be proceeding with its original plan to transfer Holt's Military Banking, which serves the UK armed forces, to the Spanish bank, the publication added.