HSBC flies to Canary

HSBC Holdings, the banking giant which owns Midland Bank, is to move from the City to Canary Wharf at cost of pounds 500m.

The bank is to build a 41-storey headquarters which will house 8,000 employees.

Staff at 10 HSBC buildings in the City are scheduled to move to Canary Wharf. This includes employees at HSBC's headquarters in Lower Thames Street and at Midland Bank's headquarters near Bank, as well as investment banking, treasury, insurance and asset management staff.

John Bond, group chief executive, said: "It has become increasingly evident to us that having our businesses and support departments located in different premises is far from satisfactory. We have decided that it would be in the best interests of the group if most of our London-based operations - other than our branches -could be housed together."

Staff reaction was mixed, according to one source. Many were yesterday unaware of the decision to move.

The bank will acquire both the building and the naming rights from Canary Wharf under a 999-year lease. The building will link directly to London Underground's Jubilee Line extension.

The bank said it had considered many locations. "The agreement we have reached with Canary Wharf meets all our criteria," Mr Bond said.

The City and Canary Wharf have been engaged in a long-running battle to house London's banking community. Banks that have chosen Canary Wharf, developed in the 1980s, include Morgan Stanley Dean Witter, Credit Suisse First Boston and Barclays Capital. Others, such as Merrill Lynch and Deutsche Bank, have spurned Canary Wharf.