Barclays is preparing to cut at least £2bn from its annual cost base of £20bn as part of a strategic overhaul to be presented by the bank on Tuesday, say bank insiders and analysts.

The cuts are to focus on a retrenchment from some of Barclays’ investment banking operations in Asia, particularly its equities franchise, as well as a partial wind-down of retail and commercial banking in parts of Europe, such as Italy, bankers said.

As many as 2,000 jobs are set to go in the investment bank, with many thousands more at risk in other areas, under plans to be unveiled by Antony Jenkins, chief executive.

Mr Jenkins, who started in the job in August, is struggling to reinvent Barclays’ ethical values alongside a mission to revive financial performance. He has told colleagues he will pull the investment bank out of areas that conflict with those values, such as the trading of food-based commodities and the kind of aggressive tax structuring for which the bank was once famous.

At its peak, Barclays’ controversial tax structuring unit, led until 2009 by Roger Jenkins, contributed the bulk of the group’s investment banking revenue.

However, the business, which specialised in often aggressive tax avoidance for clients and the bank itself, is now seen as one of the main reasons for the damage done to Barclays’ reputation.

“It’s not before time that it has been closed down,” said Vince Cable, UK business secretary. “It was completely unacceptable behaviour – it should not have happened.”

People close to the bank said its CEO was unlikely to set a new target for the bank’s return on equity, disappointing investors, and would instead reiterate a pledge to beat the bank’s cost of equity, currently 11.5 per cent. In the first nine months of the year, Barclays generated an ROE of 8.8 per cent.

Investors will also hope for news of Barclays’ strategy for strengthening its capital base. The bank issued $3bn of innovative securities in November but may need to issue another $9bn of so-called contingent capital to meet UK regulators’ demands, analysts said.

The overhaul – under what Mr Jenkins has called his Transform programme – has involved detailed scrutiny of 75 business lines and will not entail a dramatic withdrawal from any large areas. It was described by one banker as “surgery, not butchery”.

Mr Jenkins has sought to focus investors’ attention on the strategy update, by pre-announcing other news in recent days. Ten days ago, the CEO said he would waive any bonus entitlement for 2012. This followed mounting criticism of his potential £2.75m payout after a year that saw the bank fined £290m for Libor manipulation in an affair that triggered the departure of Mr Jenkins’ brash predecessor Bob Diamond.

There have also been regulatory probes into illicit payments in the Middle East and spiralling product mis-selling cases amid stagnating financial performance.

Last Tuesday, Barclays doubled to £850m its provision for compensation of interest rate swaps mis-selling and added another £600m to the money set aside to fund payment protection insurance compensation. A week ago the bank said Chris Lucas, finance director, and Mark Harding, general counsel, would step down.

Bankers in the US, where Barclays bolstered its position through the 2008 acquisition of the local Lehman Brothers’ operation, said there would also be cuts in the equities and commodities business there.

Mr Jenkins is expected to confirm that Rich Ricci, a US national and survivor of the previous Barclays management team under Mr Diamond, will remain in charge of the investment bank, at least for the time being. But there are still doubts that Mr Jenkins, a retail banker by background, can win the confidence of the “Lehmanites”.

A recent one-hour conference call on ethics was met with sneering by US bankers, according to insiders, who said they hankered after Mr Diamond and were dismissive of Mr Jenkins’ attempts to overhaul the bank’s culture.

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