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RBS TO SLASH 4,000 JOBS AS IT DOWNSIZES

ROYAL Bank of Scotland (RBS) yesterday dropped a bombshell on workers by announcing it will axe 3,700 jobs across its retail branch network, as the Treasury and the European Commission today prepare to list a raft of assets the bank will be forced to sell off as part of a restructuring agreement.<br /><br />The beleaguered bank said the job cuts form part of its ongoing investment for the future and insisted the decision was completely independent of its negotiations with Brussels.<br /><br />The news comes as RBS and fellow part-nationalised bank Lloyds Banking Group prepare to raise some &pound;54bn in fresh funds, including: <br /><br />&bull;Lloyds raising &pound;13.5bn in a rights issue &ndash; including &pound;5.9bn of new shares bought by the Treasury;<br /><br />&bull;Lloyds&nbsp; issuing &pound;7.5bn in innovative bonds;<br /><br />&bull;The Treasury pumping &pound;25bn of fresh cash into RBS;<br /><br />&bull;The Treasury setting aside an &pound;8bn contingency fund to rescue RBS in the event of another financial crisis.<br /><br />In total the government will set aside up to &pound;38bn of state funds to strengthen both banks. <br /><br />Meanwhile, EU competition commissioner Neelie Kroes has decided to put RBS&rsquo;s commodity trading joint venture RBS Sempra on the block to increase competition in the sector, as a penalty for accepting state aid during the financial crisis. RBS paid $1.35bn (&pound;825m) to Sempra Energy for a 51 per cent stake in the business in 2007.<br /><br />Other assets which the bank could be forced to sell include: 312 of its branches in England and NatWest branches in Scotland, which will be rebranded as Williams and Glyn; the lucrative RBS Insurance arm, including the Churchill, Green Flag and Direct Line brands; and its US retail arm Citizen Bank, a key asset for chief executive Stephen Hester.<br /><br />An EU decision on the extent of the break-up of RBS and Lloyds is expected this morning, to coincide with an announcement from the Treasury on participation in its asset protection scheme (APS).<br /><br />RBS is expected to confirm it will pump &pound;270bn into the toxic loan insurance programme, for which it will pay annually under a &ldquo;pay-as-you-go&rdquo; arrangement with the Treasury instead of stumping up a hefty upfront fee as originally agreed. <br /><br />The revelation of job losses at RBS yesterday caused fury among unions, with Unite national officer Rob MacGregor claiming the plans were &ldquo;absolute madness&rdquo;.