Is HSBC a British bank? Or a Chinese bank? Or a bank drifting like flotsam on a global sea, driven by the ever-varying visions or pecuniary interests of its leaders?

It is a question the bank, which is celebrating its 150th anniversary this year, needs to answer if it is to survive at all rather than be gradually dismembered. It took a small step to its own dismemberment last week when it announced that it was seriously studying a move of its headquarters from London, most likely back to Hong Kong, where it had been founded and which remained its hub until 1993.

The bank’s move then was partly prior to the 1997 handover of Hong Kong to China but partly in furtherance of ambitions to be a global bank with retail operations on all continents and to be a player in the big London- and New York-centered investment banking arena dominated by the likes of JP Morgan Chase, Goldman Sachs and others. In short it sought to follow Citigroup with operations across the financial services spectrum as well as geographically.

The threat to leave London has been taken by cynics as a diversion from bank’s poor profit performance under chief executive Stuart Gulliver, to a large extent the result of a series of huge fines imposed or about to be imposed on the bank for a series of what appear to be crimes or serious demeanors: laundering Mexican drug money, manipulating foreign exchange markets, conspiring to enable rich clients to defraud tax authorities in several countries, notably France, via its Swiss-based private banking arm.

To make matters worse, Gulliver was found to have been funnelling his huge bonuses to a company in Panama, which was not illegal but was apparently done to hide them from colleagues. So much for trust, supposedly the main qualification for a bank and its managers.

Market manipulation and money laundering transgressions were hardly unique to HSBC. Others including Deutsche Bank, Paribas, Barclays, UBS, Citi, JP Morgan Chase and Standard Chartered have been hit with similar accusations and got away with fines (paid for by the shareholders) rather than criminal prosecution of individuals responsible.

But HSBC has a particular problem in not really knowing where its heart lies. Its retail operations overall are huge but only in two is it a major player: Hong Kong, where it and its Hang Seng subsidiary have about 40 percent of deposits, and the UK where HSBC (which took over Midland Bank in 1992 ) has about 10 percent. Elsewhere it is a minor player in markets ranging from Malaysia to France, the US and Brazil. It currently makes 60 percent of its profits in Asia but the vast majority are from a long-privileged position in the lucrative Hong Kong retail market.

Operations in Malaysia, Singapore and elsewhere were once more important but preferences given to locally owned banks have restricted HSBC’s Asian growth. Indeed, it seems to have no idea of what it wants to do in Asia given that two years ago it sold its operations in Thailand – the first-ever bank in that country – although it is trying to re-grow in Vietnam, Indonesia and the Philippines, and with 50 branches has a mid-size presence in India.

It first foray to the west was in 1980, acquiring Marine Midland, a largely retail bank in the northeast US but it sold most of that a decade ago to focus on investment banking in the US. Only in the UK and to a lesser degree France does it have a significant retail presence in Europe and almost none in South America and Africa

Gulliver’s threat to leave London is claimed to be because of two separate issues: increased taxes (a levy on the balance sheet) and the future ring-fencing of local retail operations threatened by reforms being introduced subsequent to the 2008 financial crisis to protect both government and depositors from bank failures. The ring-fencing would require the UK bank to have separate directors and IT systems from the investment bank.

The levy hurts UK-based banks more than any other as it applies to most of the deposit liabilities, offshore as well as onshore. The amount was also recently increased. However it also seems likely that the UK would adjust it again if it fears a large exodus from London. As for ring-fencing, the only option for HSBC would be to leave the UK entirely.

As for alternative locations, Hong Kong’s Monetary Authority has been quick to express the idea that the territory would be ideal. But that is dubious. The HKMA’s own experience in bank regulation is limited to its own small patch, it is a not a sovereign state which can issue sovereign guarantees. Hong Kong’s other financial markets are conspicuously poorly regulated, with prominent figures let off legal and other hooks.

Would US officials or those of the EU or European Central Bank accept HSBC’s Hong Kong domicile with equanimity? As for hoping for lighter regulation, the UK has actually been quite lax compared with the US authorities and wherever it is based HSBC contraventions cannot escape the wrath of US regulators and lawyers if they want to do business there.

HSBC’s business profile has changed massively since it moved out of Hong Kong. So too has the political situation. Perhaps it would have been better had HSBC never had grandiose visions which took it not just to buying retail operations in UK, US, France etc. but private banking, low-income mortgages and high end investment banking.

The first was through acquisition of Republic Bank, whose Swiss-based arm became HSBC Private Banking. The tax evasion credentials of Republic were no secret as its founder, Brazilian Edmond Safra, a Lebanese-born Jewish trader, was known both for past connections to drug trafficking deposits dating to 1957, and a passion for secrecy. Safra was murdered in Monaco in 1999.

The high-priced 2003 acquisition of Household Finance in the US was an even greater blunder, financially and ethically. Household was in the van of the US boom in lending to low-income households to buy homes they could not afford. This eventually cost HSBC billions in loan write-offs and a write-off to its reputation for prudence and conservative banking.

As for investment banking, it has never quite made the top league – which perhaps was fortunate enabling it to survive the 2008 crisis without need of official help. But its string of not-too-successful efforts by a staid but reliable commercial bank to add some glamor are a reminder. The names Wardley, James Capel etc are now largely forgotten but there is a long history of HSBC’s failed attempts to broaden its base by using its Hong Kong’s profits to make acquisitions outside its area of experience.

Now it is in the hands of Gulliver who is from the investment banking world and hence obsessed with short term considerations – not excluding the size of his bonus. Thus at the same time as it mumbles about leaving London and saving billions from the levy – which predictably gave a quick boost to a flagging share price – it has also suggested saving money by pulling out of Turkey and Brazil. These may not fit its geographical spread but they are at least large and important economies. Meanwhile its presence in the main Asian markets Japan, Korea and Taiwan is minimal and like other foreigners is a very minor player in China.

A return to Hong Kong with a sovereign guarantee would only come with China’s approval. And why would China want that rather than back the international ambitions of its own state-owned domestic banks? Or would China see this is an opportunity to bid for HSBC, sell off a lot of the non-core activities and inject Asian retail and global investment banking into one of its national champions?

Meanwhile in Hong Kong as in its traditional locations in the former British territories, HSBC’s future is likely to be one of continued relative decline. In Hong Kong mainland banks are more aggressive, and in Malaysia and Singapore it operates on a very uneven playing field.

Big global banks operating in retail, commercial, investment and private banking are hard to manage at the best of times and harder still when management has no evident over-arching strategy, moving into this and out that as the waves of fashion, chance and short term advantage take them. It may be that London will decline anyway as the two-decade long boom in financial services, algorithm competition and out-and-out gambling with depositors’ money winds down. But even that will not solve the problem of what HSBS wants to be, or can be.