London Banks Rewrite Return to Office Plans as Lockdown Extended

(Bloomberg) -- The City of London may remain a ghost town for a little longer yet.

Deutsche Bank AG has told staff that plans for a staged return to their U.K. offices are being delayed after Prime Minister Boris Johnson announced an extension of pandemic restrictions until July 19, according to a person familiar with the matter.

The German lender had previously told U.K. staff they would be encouraging more staff to return from June 21, which the U.K. government had said in February would be the earliest time by which all lockdown restrictions would be lifted. That timeframe has now been pushed back until the government decides to remove all legal limits on social contact although workers with business or personal reasons to work from the office can still do so, the person said.

Firms including JPMorgan Chase & Co. and Goldman Sachs Group Inc. are also reviewing their earlier messaging around a staged return from June 21, according to people familiar with the matter. A delay means that with the summer holiday season approaching it is possible that early September may be the first test of any widespread return to the office in the City of London.

The hold up is a blow for the financial center’s struggling businesses that used to serve half a million commuters each day. The influx has been a fraction of that for more than a year now and the pandemic-induced transition to remote work has led some to question the future of financial centers and the urban economies they underpin.

Read more about the U.K. return to the office

Foot traffic levels in the main London offices of Bank of America Corp., Citigroup Inc., Goldman Sachs, JPMorgan and Morgan Stanley, which have a substantial proportion of traders and investment bankers among their headcount, were estimated on average to be about a fifth of the pre-pandemic norm as of May 24, according to Orbital’s analysis, which monitors activity levels through satellites and mobile phone data.

Traffic at British banks like HSBC Holdings Plc and Standard Chartered Plc, whose buildings have more staff focused on retail operations and head office activities, was less than half that level, according to Orbital. Standard Chartered has moved to a flexible working model while HSBC has said it is looking to cut office space by 40% in the long term. Retail-focused NatWest Group Plc said it expected just 13% of its staff to work mostly from the office after the pandemic.

Read more about the City of London’s return to the office

Even for those firms still betting on the office environment, any return to the office was set to be slow and uneven and June 21 wasn’t going to mark a wholesale return to normal. At JPMorgan, for instance, it was the date from which a wider selection of teams could gradually bring people back while the continuing 50% limit on building capacity means rotating staff into the office is expected to be the norm for the foreseeable future.

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