Royal Bank of Scotland is fixing a 3-year plan to further reduce risk and focus more on domestic retail and corporate banking

(Reuters) - Royal Bank of Scotland is to axe about 3,500 investment bank jobs and sell or shut equities and advisory business under a 3-year plan to further reduce risk and focus more on domestic retail and corporate banking.

RBS will reorganize its wholesale business into "markets" and "international banking," scrapping GBM. Former GBM chief executive John Hourican will head the two businesses.

The move could see the disappearance of Hoare Govett, one of the oldest and most distinguished names in British corporate broking. RBS acquired the business as part of its disastrous purchase of parts of Dutch bank ABN Amro in 2007, but it has remained a second-tier firm in equities.

Australia and New Zealand Banking group and Commonwealth Bank of Australia are considering bidding for parts of Royal Bank of Scotland's Australian unit, two sources with knowledge of the issue said on Thursday.

RBS, 83 percent owned by the UK government, on Thursday said it will exit from cash equities, corporate broking, equity capital markets and mergers and acquisitions businesses.

UK finance minister George Osborne last month told the bank to shrink GBM further to become less risky, even after halving in size in the last three years.

Sources:
Reuters