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HSBC shakeup: What you need to know

Catherine Boyle

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FW:  Sept. 16, 2015

(Jun 1, 2015)

Just a few years ago, HSBC's status as a banking behemoth seemed unshakable. It appeared to have navigated the global banking crisis with relative aplomb. Despite taking a serious hit from its U.S. mortgage business, this was balanced by growth in its emerging markets business. Its aim to be the "world's local bank" seemed to have paid off.

Now at an investor day in London this Tuesday, Stuart Gulliver, the bank's chief executive, is set to launch a second big effort at root-and-branch reform in just four years.

This has already been one of the most dramatic years in HSBC's 150 year old history, with explosive allegations that its Swiss private bank helped hundreds of wealthy clients to evade tax. It is midway through a deferred prosecution agreement with the U.S. over earlier accusations it helped launder money for drug cartels and clients from Iran, and has even been dragged into the Fifa bribery scandal after processing payments allegedly used for bribes – although there is no suggestion the bank was aware of this.

Read MoreHSBC to cut thousands of jobs globally: Sky News

Along with some of its competitors, HSBC has also paid fines or compensation for the foreign exchange manipulation scandal, and the interest rate swaps mis-selling controversy. It has yet to settle with authorities over an expected fine as a result of the the Libor-fixing scandal.

So, what is Gulliver likely to announce, and will it please the bank's investors?

What’s going wrong inside the bank…?

Gulliver's earlier efforts to scale back HSBC's gigantic operations haven't quite managed to reach the ambitious targets he had set. Last year, return on equity hit 7.3 percent, down from 9.2 percent in 2013 and lower than the 10 percent targeted -- which had itself been cut from an earlier 12-15 percent target.

The various scandals have highlighted the problems of running an operation on the scale which HSBC now does.

Read MoreHSBC has a 'terrible list of problems': chairman

http://www.cnbc.com/2015/06/05/hsbc-shake-up-what-you-need-to-know.html