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* HSBC to house newly separated HSBC UK in Birmingham
* Plans to move 1,040 jobs there by end of year
* Upgraded relocation package to entice London staff
* Other financial firms shift jobs out of London
By Lawrence White
BIRMINGHAM, England, June 1 (Reuters) - HSBC said it is on track to complete the shift of more than 1,000 jobs to Birmingham after offering a souped-up version of its standard relocation package to entice staff from London.
The bank is building an office in Birmingham to house its newly separated high street lender HSBC UK, but British media has reported the project has been delayed because staff were unwilling to move to the city, which is in the heart of the industrial Midlands region.
Antonio Simoes, chief executive of HSBC Bank plc, the group's British arm, acknowledged some problems but said the bank had already filled more than half of the new roles in Birmingham, Britain's second-biggest city.
"We have had some challenges but today we are ahead of where we thought we would be, with around 53 percent of the roles filled," Simoes told Reuters at the new Birmingham office on Thursday.
The 10-storey building will formally open in January and reflects a growing trend for financial firms to move jobs away from Britain's capital due to its pricey property market.
HSBC plans to shift 1,040 jobs to Birmingham, mostly from London, by the end of this year and has invested 200 million pounds ($257 million) in the city, including the new building and relocation packages, Simoes said.
"We've made the standard package more attractive by offering for example support for housing and children's schooling," he said.
The most challenging areas to recruit in have been in marketing and communications, Simoes said, as people in those professions tend to be London-based.
Reports last year in British newspapers said that an independent monitor tasked with overseeing the bank criticised the pace of its progress in shifting jobs to Birmingham.
The creation of HSBC UK is in response to laws set out in 2013 that require British banks to separate their high street business from investment banking in order to protect savers' money.
HSBC has estimated the total cost of this "ringfencing" project at 1.5 billion-2 billion pounds, including the construction of the new headquarters, moving staff and separating and testing HSBC UK's IT infrastructure and systems.
The bank already had 2,500 staff in Birmingham, which has been one of the main beneficiaries of the financial sector's shift away from London.
Of 2.2 million people employed in financial services jobs in the UK, two thirds now work outside London according to data from industry lobby group TheCityUK.
Financial jobs in Birmingham rose by 6.9 percent between 2013 and 2015, the group said. Other large financial employers in the city include Deutsche Bank, which has increased its staff in the city from 35 in 2007 to 1,500. ($1 = 0.7780 pounds) (Editing by Susan Fenton)