The scheme includes reinstating front boundary railings, creating cycle and bin storage and providing three off-street parking spaces to the rear.
The building – originally two homes before being converted into a bank in the 1970s – has stood empty since the RBS branch closed in 2019.
Six residents objected to the plans, raising concerns about the pressure on parking, the potential for increased noise, and the impact on the character of the area.
A statement from the applicant read out at the meeting said they had amended the scheme, and asked councillors to consider the parking and vehicle movements that would be generated from an HMO, in comparison to the bank.
They added: “The property has been vacant for a long time. It’s highly unlikely a bank will open in the property again. We are returning it to its original use.”
Council planning officers acknowledged the site lies within a designated zone where retail is preferred, but said the property was “not easily converted into retail use” because of its character and “historic use”.
Transport and environmental health officers also did not object to the scheme, the Local Democracy Reporting Service said.