FOCUS-Banks weigh up home working - the new normal or an aberration?

* Some banks shed office space to cut costs

* Trading floors set to return

* Warnings on productivity losses, diversity hiring issues

By Lawrence White, Iain Withers and Muvija M

LONDON, Feb 26 (Reuters) - As the finance industry prepares
for life post-pandemic, commercial banks are moving quickly to
harness working from home to cut costs, while investment banks
are keen to get traders and advisers back to the office.

HSBC and Lloyds are getting rid of as much
as 40% of their office space as an easy way to make savings when
bank profits have been crunched by the pandemic.

But there are concerns that remote working does not benefit
everyone. Junior staff miss out on socialising and learning
opportunities and there are also risks home working can entrench
gender inequality.

At investment banks, where long hours in the office were the
norm pre-pandemic, bosses say they want most people back where
they can see them.

HSBC plans to almost halve office space globally, as it aims
to squeeze more use out of the remaining space and increase the
number of staff per desk from just over one to closer to two.

Britain's biggest domestic lender Lloyds plans to shrink its
office space by a fifth within three years. Standard Chartered
will cut a third of its space within four years, while
Metro Bank said it would cut some 40% and make more use
of branches.

"We've had a period where flexible working has been tested
in full, with about three quarters of people not based in
offices as we used to call them, and the business has performed
remarkably well," Andy Halford, Standard Chartered CFO, said.

But major investment banks take a different view, with
Goldman Sachs Chief Executive David Solomon pouring cold
water on the potential of remote working.

"It's not a new normal. It's an aberration that we're going
to correct as soon as possible," he told a Credit Suisse
conference on Wednesday.

Barclays CEO Jes Staley, who last year said he
thought the days of 7,000 employees trudging into its Canary
Wharf headquarters were numbered, is also unwilling to commit
for now to large office closures.

The Barclays boss has said the bank had "no plan" to make a
major real estate move as Britain's prolonged third lockdown had
shown the strains of working from home.

Nick Fahy, CEO of online lender Cynergy Bank, said working
over screens often could not compete. "You might have a
disagreement on this, that or the other but actually over the
coffee machine or over a glass of wine or a bit of lunch, issues
can be resolved."

UNINTENDED CONSEQUENCES

Some banks have acted quickly because they are used to
flexing workforces in line with economic cycles, particularly in
investment banks, Oliver Wyman principal Jessica Marlborough
said.

But some are waiting on analysis of staff productivity
changes before making final decisions, while others were mindful
junior staff may still prefer going into offices, she said.

Banks are also concerned women may lose out from the shift
to remote working.

"We thought the pandemic would be a big leveller for women.
But actually what we're starting to see is it's extremely
challenging to get women to move jobs in a pandemic,"
Marlborough said.

"Banks were making progress in hiring a more balanced
workforce in terms of gender and other metrics, but they're
actually struggling now (as banks are finding) they (women) are
less likely to seek out a new job."

Union leaders said part of the reason was that some women
are juggling more childcare responsibilities during the
pandemic.

Dominic Hook, national officer for UK union Unite, said
banks must ensure working from home is voluntary, use of
surveillance tools is limited, and employers respect staff hours
so work does not spill into evenings and weekends.

"Our concern is that it won't actually be a choice and that
banks will pressure staff to work from home," Hook said.

There are also concerns hybrid working will favour employees
who visit the office more regularly, as they can spend more time
in person with colleagues and managers, said Richard Benson,
managing director at Accenture Interactive.

The staff most likely to go back to the office are traders,
bank executives said, while back-office functions such as
finance, risk management and IT will spend more time working
remotely.

In Germany, Deutsche Bank said it had been
challenging to adapt home office spaces for traders and expected
many will want to return, but not all.

"We will pay more attention to the personal circumstances at
home. Dealers also have children or parents in need of care. We
have become more sensitive," said Kristian Snellman, Deutsche
Bank's head of investment banking transformation for Germany and
EMEA.

The trend to shed offices predated the pandemic as many
banks made cuts after the 2007-09 financial crisis. Some have
already made moves as a result of the pandemic, such as NatWest
, which shut its tech hub in north London last summer.

Retained offices are being remodelled, with desks removed to
make way for collaboration and break space such as coffee areas,
gardens and libraries, property consultancy Arcadis said.

"It's not just about adding a ping pong table and table
football and hoping it will work, it's about making sure people
get downtime," said Sarah-Jane Osborne, head of workscape at
Arcadis.

David Duffy, CEO of Virgin Money, said the bank is
among those planning to strip out office cubicles.

"The world of large-scale populations returning to a tall
skyscraper building to come in and do their e-mail in the office
doesn't make any sense," he said.
(Reporting By Lawrence White and Iain Withers in London and
Muvija M in Bengaluru, Additional reporting by Patricia Uhlig in
Frankfurt. Editing by Rachel Armstrong and Jane Merriman)