A plan to spin off Royal Bank of Scotland's global mergers and acquisitions division into a boutique operation, in which the majority state-owned lender may hold a stake, could be finalised by the end of the year, said Simon Penney, chief executive of RBS in the Middle East and Africa.

The move is seen as part of a broader package of measures being taken by the 82%-government owned bank to strip back its balance sheet by disposing of riskier operations and to refocus as a retail bank.