Royal Bank of Scotland's deputy head of global banking and markets will step down as the nationalised bank prepares to announce further cuts in its investment banking division.

Leith Robertson, who pioneered the bank's strategy of backing debt-heavy private equity deals in the 1990s, is expected to retire from the bank, which will detail up to £28billion of losses next week.

Insiders expect another big cull in Mr Robertson's division because RBS - which is now 68 per cent owned by the taxpayer - has found it hard to justify continuing many of its investment banking activities. RBS declined to comment.

The global banking division includes parts of ABN Amro, which RBS took over in 2007, in which many of the bank's worst debts lie. However, the division also houses a number of loans linked to buyouts by private equity firms and other debt-heavy corporate takeovers.

As deputy head of the division, Mr Robertson did not personally sign off the vast majority of its loans. However, after setting up the bank's leveraged lending division in the 1990s, he was the face of RBS for many private equity houses and some international corporations and investors.

The retirement of Mr Robertson, who is in his late fifties, completes the changing of the guard in the division, whose chairman, Johnny Cameron, stepped down last year after the government bailout.

RBS underwrote more leveraged global deals at the top of the market than any other UK bank. Total lending by Lloyds TSB and HBOS in the 18 months before the credit crunch in July 2007 was well below that of RBS.

RBS's business model was to sell on some debt to other investors, so the bank was left holding fewer bad loans than HBOS when the credit crunch struck. But the global markets division is still exposed to troubled companies.

It is the lead lender to Four Seasons Health Care, which was bought out by Qatar's sovereign wealth fund for £1.4billion, and owes a consortium of banks £1.3 billion. It is now valued at less than half of that, but RBS owns more than £200 million of its debt.

The bank is also exposed to private equity buyouts such as Park Resorts, the caravan park business, whose private equity owner has had to inject more cash to stabilise it, and Gala Coral, the gambling company, whose backers have also injected more cash.

It also backed a buyout by Charterhouse of Barracuda pubs, which has drafted in Deloitte as emergency debt-restructuring advisers.

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