TIDJANE THIAM’S final results as Chief Executive Officer of Credit Suisse Group AG validated his shift to wealth management while again demonstrating the volatility of the investment bank and trading businesses.

A pre-tax loss of about 60 million francs ($61 million) at the investment bank was worse than analysts had expected, while the rebound in profit at the global markets business in the final quarter of the year didn’t quite match forecasts. That’s been a pattern of Thiam’s tenure, where unpredictable earnings at the two have often overshadowed gains in its key private banking unit.

Mr. Thiam is presenting a mixed set of numbers after a tumultuous four years in charge, marked by a painful restructuring that tapped shareholders for billions of funds and saw the once-revered Wall Street trading house pare back trading. The Ivorian, after exiting overhaul mode, saw the final months of his tenure sink into tabloid scandal after a feud with his former head of wealth management escalated into a fully-fledged corporate spying scandal, culminating in news of his exit last week.

His accomplishments include slashing costs, improved trading results and pivoting Credit Suisse to focusing on managing money for the rich, following in the footsteps of a similar strategic move by rival UBS as he sought greater predictability in earnings. His restructuring has been showing signs of bearing fruit before bizarre recent disclosures — executives spied upon, grudges among top managers — forced the board to take action against him in an attempt to stem months of bad press.

The international wealth management business, cornerstone of the bank’s strategy under Mr. Thiam, saw both revenue and pre-tax profit beat analyst estimates, though results were boosted by a 192 million franc revaluation gain from its equity investment in Swiss stock exchange Six. The Swiss Universal Bank, which falls under incoming CEO Thomas Gottstein, also did better than expected while Mr. Thiam can also point to improved capital buffers and revenue as another positive aspect of his legacy.

“I feel like the machine is turning and producing better and better results,” Mr. Thiam said in a Bloomberg Television interview on Thursday, striking a confident tone about the start to the year. The first quarter is off to a “flying start,” he said.

THIAM’S TROUBLES
Mr. Gottstein, a 20-year Credit Suisse veteran, is the bank’s first Swiss chief in almost two decades. His biggest achievement until now was overseeing one of the crown jewels of the lender, the unit known as Swiss Universal Bank. A sort of miniature Credit Suisse focused on the domestic market, it is the biggest contributor to pre-tax profit and includes a private banking arm as well as investment banking.

Mr. Gottstein will now have to persuade investors — especially those who backed Mr. Thiam in the final days of the showdown with Chairman Urs Rohner — that he can translate his experience as head of the Swiss unit onto a global scale and build on the turnaround while keeping other top managers onside. While shareholders including Harris Associates, the bank’s largest, have offered their support for Mr. Gottstein, it also repeatedly called on Mr. Rohner to step down, suggesting the drama may not be over.

The origins of the bank’s troubles can be traced back to at least a year ago, when Thiam and Khan got into an altercation at a party. While their falling-out didn’t become public until later, inside the bank it was an open secret that the relationship had soured. Reports varied on the origins of the dispute, with some saying it was personal and others hinting at frustrated ambition and professional jealousy. The upshot: Khan left Credit Suisse in July and announced shortly after he was joining UBS.

The situation only worsened from there. By September, it emerged that Credit Suisse had hired private investigators to spy on Khan and prevent him from poaching former colleagues. The allegations — tabloid fodder for weeks — forced Credit Suisse to start an inquiry into the surveillance. While that cleared Mr. Thiam, he was damaged after a close confidante took the fall. Then a second spy case surfaced, prompting Rohner to start succession planning, according to people with knowledge of the matter.

Mr. Gottstein will take over with the task of brokering peace among executives and restive stockholders — some of whom are still calling for Mr. Rohner to follow Mr. Thiam out the door. Mr. Gottstein will be the third chief executive officer under Mr. Rohner’s chairmanship. — Bloomberg

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