Royal Bank of Scotland is to cut 3,700 jobs across its UK branch network.

The company said on Monday that the move was made in a bid to modernise the way the bank operates. The redundancies follow a strategic review of the bank and will take effect from May next year.

Reacting to the news, the Unite union angrily denounced the job losses calling them "absolute madness".

Currently, 25,000 people are employed in the branch department of the bank. The job losses announced on Monday means that around 14 per cent of these people will loose their jobs.

In Scotland, it depends on who accepts voluntary redundancy. The bank employs 4,400 in its retail division in Scotland, so as many as 600 jobs could go north of the border.

The announcement comes as plans to break up RBS and Lloyds Banking Group following orders from the European Commission is set to be revealed on Tuesday. The duo has been told to sell off parts of their business to safeguard competition concerns as the price of State support.

Unite national officer, Rob MacGregor, said: "For RBS to announce the cut of 3,700 frontline bank staff from their high street branches across the UK is absolute madness. Essentially RBS has decided that frontline costs should be cut, to fund the crisis caused by the City bankers.

"This move to reduce frontline clerical branch staff by up to a third is short-sighted in the extreme. High street banks are busier then ever as customers increasingly seek a trusted friendly local service.

"The union is angry that this majority taxpayer-owned bank has totally misjudged the public's appetite for a return to traditional banking.

"The staff hit by this decision will be amongst the lowest paid within RBS, some of the longest serving and most loyal who have worked in the local branch network for many years."

Brian Hartzer, CEO, UK Retail, Wealth Management and Ulster Bank Group, said: "We need to do better for all our customers and shareholders by modernising the way we operate as a bank.

"We have 30% more staff carrying out administrative duties per customer than our competitors and they spend less than half their time dealing with customers - we can and must do better.

"We have under-invested in our branches and customer infrastructure at a time when people are changing how they bank and changing what they expect their bank to do for them. We have to change that if we are to rebuild our success by serving our customers better.

"The job losses this means are deeply regrettable but are necessary. We don't like what that means for our people but will do all we can to ensure compulsory redundancies are kept to an absolute minimum."

John Swinney, the Finance Secretary, added: "This is, of course, enormously disappointing news for the staff impacted. I accept RBS' commitment to minimise compulsory redundancies. We will continue our already productive engagement with RBS through the Finance Sector Jobs Taskforce to identify appropriate intervention.

"If necessary, we will concentrate on ensuring that every individual obtains the full support of government agencies to help them find alternative employment or upskilling opportunities. Through our Partnership Action for Continuing Employment initiative, we will focus on keeping people in work or giving them skills to develop their careers.

"Scotland continues to have real strengths in financial services with recent announcements from Tesco Banking and ensure giving us cause for optimism."
 
RBS is currently 70% owned by the taxpayer.