Royal Bank of Scotland is expected to axe up to 4,000 investment banking jobs and sell or shut part of the business on Thursday after being told to reduce risk and focus more on domestic retail and corporate banking.

RBS, 83 percent owned by the government, will unveil a review of its global banking and markets (GBM) division that is likely to include 3,000 to 4,000 job losses, a person familiar with the matter told Reuters.

It will include the sale or closure of some businesses, such as cash equities and other parts of the Hoare Govett corporate broking business, the source said. Some parts of GBM will be merged with payments business Global Transaction Services (GTS), which shares many customers with GBM.

Australia and New Zealand Banking group and Commonwealth Bank of Australia are considering bidding for parts of Royal Bank of Scotland's Australian unit, two sources with knowledge of the issue said on Thursday.

Some 46 billion pounds of taxpayer cash was pumped in to save RBS during the financial crisis, and Chancellor George Osborne last month told the bank to shrink GBM further to become less risky, even after halving in size in the last three years.

The latest move could cut more than a fifth of GBM's 18,900 staff.

Osborne said on Wednesday: I certainly have been clear in my view that RBS should scale down its global investment banking activities and become a much more UK- and Europe-focused retail bank where the investment banking primarily supports the retail bank.

RBS is separately expected to announce it is cutting more jobs at its troubled Irish business Ulster Bank to save costs, a person familiar with the matter said. That could also come on Thursday.

Lazard is conducting the sale of the equities units, and Bank of China, Japan's Mizuho Financial and Oriel Securities are among those casting an eye on them.

RBS is expected to trim GBM elsewhere, but remain in its areas of strength such as bond trading, foreign exchange, debt capital markets and cash management.

The move could see one of the oldest and most distinguished names in British corporate broking -- Hoare Govett -- change hands again or disappear. RBS acquired the business as part of its disastrous purchase of parts of Dutch bank ABN Amro in 2007, but it has remained a second-tier firm in equities.

(Reporting by Steve Slater; Editing by Elaine Hardcastle and Matt Driskill)