Royal Bank of Scotland has today confirmed plans for the loss of 2,000 investment banking jobs as its shares tumbled on the back of chief executive Stephen Hester's surprise exit.

Sources at the UK taxpayer-backed lender said the roles will be cut over the next two years under plans to further shrink its investment banking business. Job losses will be spread globally across the markets division.

The blow comes just a day after Mr Hester announced he would be leaving the bank by December - a decision that took markets by surprise, sending shares lower in London trade this afternoon.

The investment banking jobs cull comes as RBS takes further action to trim costs in the unit, having already halved the number of staff in the division from 24,100 to 11,300 last year.

It has slashed investment banking costs from £5.8 billion sterling to £2.9 billion, but wants to reduce this further to between £2 billion and £2.25 billion.

The bank's Asian operations are expected to take the brunt of the job losses as RBS refocuses on trading hubs in London, Stamford in America, Tokyo and Singapore.

The bank's chief executive Stephen Hester said yesterday that he is to leave later this year and will receive 12 months' pay and benefits worth £1.6m sterling and the potential for a £4m shares windfall from a long-term incentive scheme. He will receive no bonus for 2013.

A fall in the RBS share price pushes it further away from the break-even value of around 500 pence which would enable the UK government to sell.

There may be suspicions that Mr Hester's departure will also increase the likelihood of the company being split between a good bank and bad bank, as is expected to be recommended by the Commission on Banking Standards.

But RBS has claimed it is well on the road to recovery, despite reporting losses of £5.2 billion for 2012, driven by a £390m settlement for rate-fixing, £1.1 billion provision for mis-selling and IT glitches.

"It has been nearly five years since I joined RBS after the bank was rescued by the government. In that time we have reduced the bank's balance sheet by nearly a trillion pounds, repaid hundreds of millions of taxpayer support, and removed the imminent threat that this bank's size and complexity posed to the UK economy,'' Mr Hester said yesterday.

Sir Philip Hampton, chairman of RBS, praised Mr Hester's leadership of the bank and said he would be leaving it in a "vastly improved position that many would have thought impossible five years ago".

He added that the board had been thinking about succession for a while. The process accelerated in recent weeks as it became apparent the UK Government had a desire for RBS to be privatised towards the end of 2014, he said.

UK Finance Minister George Osborne confirmed he would "shortly" set out plans for RBS following the imminent publication of the banking commission report and said he would use his Mansion House speech next week to outline further reforms.

"Having brought RBS back from the brink, now is the time to move on from the rescue phase to focus on RBS being a UK bank that provides greater support to the British economy, helping businesses and job creation here, and which can return to the private sector in a way that ensures value for the taxpayer," he said.

RBS has launched a search for Mr Hestor's successor. He will continue in his role until December unless a successor is in positon before then.