Nationalised financial group the Royal Bank of Scotland (RBS) is shedding 2000 jobs from its insurance arm as it prepares to sell the division.

The new layoffs covering operations in Direct Line, Churchill and Green Flag take the company’s total number of staff sackings to more than 26,000 since the global financial crisis tore through British financial services.

The UK Government now owns 83% of RBS, which has announced in November that it will sell its insurance business after European regulators stated it must offload assets.

RBS says the job cuts will be rolled out over the next 12 months. Another 500 jobs are also expected to move offshore.

“We are working hard to rebuild RBS in order to repay taxpayers for their support and having to cut jobs is the most difficult part of this process,” a spokesman said.

RBS is also seeking a buyer for its UK retail assets, with  National Australia Bank and Spanish group Santander the front-runners for the 318 branches.