RBS refers clients to Paribas for transaction services

(Refiles to additional subscribers)

* Move part of restructuring announced in February

* Division will focus on home markets of UK, Ireland (Other OTC: IRLD - news)

LONDON, July 2 (Reuters) - Royal Bank of Scotland (LSE: RBS.L - news) said it will no longer provide cash management and trade finance services to thousands of customers outside Britain and Ireland and will instead refer them to French bank BNP Paribas (Xetra: 887771 - news) .

The decision is part of the plan it announced in February to shrink its investment bank and international operations and focus on lending to British households and businesses.

"As part of our strategy to make RBS a simpler, stronger and more sustainable bank, RBS Transaction Services will focus on its home market capabilities in the UK and the Republic of Ireland," Marc Townsend, head of RBS's Global Transaction Services, said on Thursday.

RBS, 78 percent-owned by the government, said it will continue to offer transaction services to both small and large businesses in Britain as well as multi-national businesses from western Europe, the United States and the Asia Pacific which have significant links to the UK and Ireland. It will also provide transaction services to global financial institutions.

The bank said there would be a streamlined process to make the transition as smooth as possible for customers moving their transaction banking to Paribas.

"We are confident that it has the people, country coverage, strong global product capability and infrastructure in transaction services to be an attractive alternative for our affected customers," said Townsend. (Reporting by Matt Scuffham, editing by Sinead Cruise)