HSBC bank says it will cut 1,700 jobs in Britain

HSBC will axe "just over 1,700" jobs, a spokesman told AFP, confirming media reports. An official statement from HSBC explaining the cuts was due later Tuesday.

The announcement came as the British government unveiled a major shake-up of the country's banking sector and one day after state-controlled Royal Bank of Scotland (RBS) said it would eliminate about 3,700 jobs across its British retail operations.

The government on Tuesday said it would force RBS and another state-controlled bank, Lloyds Banking Group, to sell assets to promote competition but would support them with 30 billion pounds (33 billion euros, 49 billion dollars).

Britain's government expects new banks to be born as a result of the break-ups, which are the result of pressure from EU competition authorities.

The parts being separated from the parent groups add up to about 10 percent of Britain's troubled retail banking market.

In return for more state aid, RBS and Lloyds will have to cut bonuses paid to top staff and increase lending to recession-struck businesses and individuals.

Lloyds meanwhile announced that it would launch a record 13.5-billion-pound rights issue, the biggest-ever sale in Britain of new shares to existing shareholders.

Tuesday's announcements come one week after the European Commission approved the state aid in plans to break up and sell Britain's nationalised bank Northern Rock.

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