HBOS to cut jobs in SME business shake-up

LONDON (Reuters) - HBOS HBOS.L could cut as many as 650 jobs as it sets up a single business to serve small and medium-sized enterprises, stepping up efforts to compete in a sector dominated by four larger domestic rivals.

HBOS plans to merge its business banking and commercial businesses by the end of 2009 as part of a strategy to boost its market share in the 800 million pound business deposits market dominated by Barclays (BARC.L), HSBC (HSBA.L), Lloyds (LLOY.L) and Royal Bank of Scotland (RBS.L).

Together, the "big four" hold an 85 percent share of the SME banking market, HBOS said.

The bank said the shake up in its structure would see around 1,000 positions shift from its retail to its corporate division.

Up to 650 employees are expected to leave the group through redeployment, voluntary redundancy and normal turnover over the next 18 months.

(Reporting by Clara Ferreira-Marques; editing by Sue Thomas)