The restructuring will see the banks' pull out of the commercial property market and narrow their focus to consumer and small business lending in Scotland and the north.

NAB plans to close 29 of the banks' 73 Financial Solution Centres, which offer services to businesses and better-off individual investors, and merge nine others with local retail branches. Six back office locations will also be shut.

National Australia Bank Group CEO Cameron Clyne says: "The UK banking cost base will be reduced by streamlining operations and technology and support functions to improve efficiency and effectiveness. While every effort will be made to support our people, the substantive repositioning of the business will impact roles in the UK. The employee consultation process will commence shortly."

The drastic action follows a poor performance in the March 2012 first half, resulting in a £25 million loss and an increase in provisions against a deteriorating loan portfolio and PPI mis-selling claims.

Restructuring costs of £195 million will be incurred in non-cash earnings for redundancy (£86 million), software impairment (£36 million, mostly against 'business banking systems'), lease break fees and other costs (£36 million in the March 2012 half year and an estimated £139 million in the September 2012 half). The restructure is expected to deliver annual cost savings of approximately £74 million upon completion by 2015.