Royal Bank of Scotland said it did not set aside any bonuses for staff in its investment bank during the third quarter after a sharp fall in income during a tough three months.

RBS said it was taking a harder line on costs when it reported third quarter results on Friday, and a spokesman confirmed that included no accrual of bonuses for staff in the global banking and markets unit in the quarter.

RBS said it is to further shrink its investment bank arm and cut more jobs as the euro zone debt crisis makes its turnaround more difficult.

(Reporting by Steve Slater; Editing by Hans-Juergen Peters)