[ by Melanie Gretchen ] RBS is considering the closure or sale of its equities unit as the lender works to shrink its investment bank, two sources close to the matter said. Regulatory change proposed by the U.K. government-appointed Independent Commission on Banking as well as shifts in investor demand have made the investment bank unsustainable at its current size, CEO Stephen Hester, 51, said.  By the ICB proposals, banks will no longer be able to to use their consumer units to provide cheap funding for investment-banking units.  Currently, the equities unit, including U.K. stockbroker Hoare Govett, employs 1,000. Sources expect an announcement by the time the bank reports full-year earnings at the end of February.  The bank, which employees 19,000, reported a 29% revenue drop in the third quarter and shares down by 49% so far this year. [Bloomberg, 12/19/11]