London, July 10: HSBC, Britain’s biggest bank, is increasing the risks taken by its investment banking arm as it strives to raise profitability at the division. The group was once traditionally so risk-averse that one former HSBC banker said the strategy was “not so much risk management as risk avoidance”.

However, Robin Phillips, co-head of HSBC’s global banking division, which includes corporate and investment banking, said there was “no question” that the bank had become more prepared to back higher-risk deals, given the enhancement in its risk management and distribution capabilities.

“We have an M&A business that is more penetrative than it was in the past,” Mr Phillips said. “It enables us to provide financial advice and balance sheet support.”

Mr Phillips argued that HSBC’s ability both to provide advice and to use its vast balance sheet to help to fund transactions gave the company a competitive advantage.

“We are often dealing with highly confidential situations and companies don’t want to have to go out to a large number of banks,” Mr Phillips said. “If you can provide advice and significant financing capability you can control the deal from the centre rather than be brought in from the outside.”

The shift in attitude to risk comes amid a restructuring at the investment bank, which led to the departure of John Studzinski, its co-head. Studzinski is joining Blackstone, the private equity group.