UPDATE 2-RBS cuts 2,600 jobs in insurance, UK retail
* Part-nationalised bank adds to 20,000 previous job cuts
* To cut 2,000 RBS Insurance jobs to streamline business
(Adds union comment, more detail)
LONDON, May 10 (Reuters) - Part-nationalised Royal Bank of Scotland (RBS.L) is cutting 2,600 jobs in its insurance and British retail banking operations, adding to 20,000 layoffs since the start of the financial crisis.
RBS, 83 percent owned by the state, said 2,000 of the jobs would be cut in its insurance operations, which include Britain's largest motor insurer Direct Line, along with brands Churchill and Green Flag, and currently employ 16,000 people.
European regulators are forcing RBS to sell a string of assets including its insurance arm by 2013, as a cost for taking billions of pounds in taxpayer bailouts. The layoffs accelerate cost-cutting at the insurance unit before its sale or flotation.
RBS, which is also selling 318 branches as part of the EU's remedy requirements, is cutting 600 jobs from its retail banking head office operations.
The bank, which employs 160,000 people worldwide, said the cuts would take effect over the next year and affect staff at sites across the country. Up to 500 of the insurance back office jobs could go 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," the bank said in a statement, adding it will aim to keep compulsory redundancies to a minimum.
RBS's 20,000 layoffs since being hit by the financial crisis include 14,000 in Britain. Fewer than one in four of the cuts have been forced redundancies, it said.
Unite, Britain's largest union, said it would oppose offshoring as well as any compulsory redundancies.
"Taken together, this is a devastating blow for a dedicated workforce which has worked very hard to turn around the fortunes of RBS following some disastrous decisions by the previous management," Unite's Rob MacGregor said. (Reporting by Steve Slater and Clara Ferreira-Marques; Editing by Dan Lalor)