Investment bankers and traders used to plush central London offices face being relocated to the suburbs, as banks take precautions over the spread of coronavirus.
Bankers have been testing back-up offices in places like Croydon, South London, and the Hampshire town of Farnborough in recent weeks in case staff need to quickly be relocated.
Major investment bank offices house thousands of staff and the fear is that if even a single employee catches COVID-19, it could spread rapidly throughout the building. With thousands of people passing daily through Canary Wharf, London’s financial centre, any infection could also spread rapidly beyond a single company.
Concerns heightened on Thursday after an employee at HSBC tested positive for the novel coronavirus. Staff on the relevant floor of HSBC’s (HSBA.L) tower block headquarters were evacuated and a deep clean ordered.
The same day, 1,200 employees at nearby S&P Global Platts, a commodity pricing agency, were told to work from home after a visitor was diagnosed with COVID-19.
Most banks have already banned non-essential travel and relaxed rules on working from home in response to the spread of the virus, but some are ramping up precautions.
JP Morgan (JPM) yesterday asked some staff to relocate to different offices from Monday. The bank hasn’t yet recorded COVID-19 cases but isn’t taking any chances. Sales and trading teams will be split up and some asked to work at back-up offices in locations such as Basingstoke, a Hampshire town 50 miles west of London.
Regulators require banks to maintain disaster recover plans to ensure they can continue to operate in the event of a terrorist attack or earthquake, for example. The idea is to limit the economic fallout of any disaster by ensuring businesses can continue to get access to credit and other financial products. These plans are now being dusted off in response to coronavirus.
A key plank of most plans is a back up office, ready to go in the event the main headquarters is taken offline.
Goldman Sachs (GS) has a backup office in Croydon, South London; Nomura (NMR) has a back up facility in Farnborough, 40 miles west of London; Barclays (BARC.L) has a second site in Northolt in the suburbs of west London; and UBS (UBS) has a spare office in Hayes, on the outskirts of London.
The locations are a far cry from the skyscrapers of Canary Wharf. Farnborough his best known for its annual air show and Surrey Live last year said the number one reason to live there is the local Vue cinema. Northolt is partly a conservation area, home to a village green and Saxon church.
Back-up offices in these locations usually lie dormant, manned by a small number of security staff, but bank employees have been visiting in recent weeks to ensure they are properly set up. Goldman sent hundreds to Croydon this week to make sure they could log on to systems.
Much of the testing is mundane: do building passes work? Can people log on to computers there? Can they get on to internal work systems once on the computer? Is software up to date?
“You don’t want to go there, log on, and see: you have 57 updates and it’ll take 3 hours,” said one person familiar with preparation work at a major European investment bank.
Barclays, Goldman Sachs, and Nomura declined to comment when contacted by Yahoo Finance UK about disaster recovery plans and coronavirus precautions.
A spokesperson for HSBC said: “We do not expect any change to the support and services provided by HSBC. The size and structure of HSBC allows us to support our clients from multiple sites. We have well practiced contingency measures that ensure critical processes continue to be maintained.”
A spokesperson for Deutsche Bank (DBK.DE) said it is “taking active steps to protect staff and clients and ensure continuity of operations across all our businesses.
“We have well-prepared contingency plans in place, and management teams that are monitoring the situation very closely.”
A spokesperson for UBS said: "The health and safety of our employees and clients is always our main priority. We are actively monitoring the situation and are in close contact with the relevant authorities.”