HSBC is moving its UK headquarters from Canary Wharf back into the City of London as it adjusts to the impact of hybrid work on its office space needs.

This could signal the reverse of the 1990s trend of banks moving out of the City in search of buildings more suited to modern banking. The City’s “Square Mile” financial district is considered the historical centre of British banking. But space and planning restrictions on building expansions made a move to Canary Wharf very appealing as banks navigated the new world of electronic trading, starting in the 1980s.

HSBC’s predecessor, Midland Bank, opened grand offices at 27 Poultry, next to the Bank of England, in 1924. But after its takeover by HSBC in 1992, this office was vacated for more modern premises on Lower Thames Street.

A subsequent move by HSBC to Canary Wharf in 2002 came more than a decade after the first tenants moved to this new site – Morgan Stanley, Credit Suisse, First Boston and Citigroup. Barclays was the last major UK retail bank to leave the City’s Lombard Street for Canary Wharf in 2005.

HSBC is now heading back to the City 21 years later, possibly at the forefront of another wave of migration, as UK-based banks adjust to the world of hybrid working practices. If bank staff are working from home for two or three days in a week, space is less crucial. Indeed, office vacancies in London are rising, particularly in Canary Wharf. The City of London, although never down and out, appears to be in ascendance again.

Our previous research into the flight of banks to Canary Wharf showed it was driven by conservation movements that aimed to preserve the City’s historical buildings. In particular, National Provincial Bank (later NatWest) wanted to transform its headquarters in the 1960s from a prestigious Victorian building into a skyscraper fit for modern banking.