Be careful what you wish for. Banks had long been begging for volatility to return. This month, they got it in spades as the rout in global stock markets sent a jolt through trading floors from London to New York.

For Tidjane Thiam, it couldn’t have come at a more helpful time. As the CEO of Credit Suisse Group AG unveiled a slightly narrower fourth-quarter loss than analysts expected, he was able to trumpet a 10 percent rise in revenue in the global markets business in the first six weeks of this year.

That helped disguise the not-so small matter of global markets being the only big business unit to miss estimates by a significant margin during the fourth quarter of 2017. Revenue from fixed-income sales and trading fell almost 5 percent in the period, while equities trading tumbled 21 percent.

Nevertheless, Thiam’s two-year effort to revive the bank by focusing on wealth management over debt trading is showing signs of paying off. The wealth division added 4 billion Swiss francs ($4.3 billion) in net new assets in the last three months of 2017. Expenses appear to be under control, with the lender beating its full-year target for adjusted costs.

Since November -- when the bank pledged to return more cash to shareholders -- the stock has risen and analysts have upgraded 12-month price targets. Before February’s market freak-out, Credit Suisse had jumped by 17 percent between the start of November and the end of January. That far outpaced the Bloomberg Europe 500 Banks and Financial Services index’s near 4 percent gain.

Thiam did little to downplay all the elevated hopes on Wednesday. He’s right to say that volatility creates opportunities (even if it puts a dampener on businesses such as underwriting and merger advisory). But he should remember it also creates new ways to trip up. You can encourage more clients to trade, but the risk of your own traders getting caught out increases.  

So far, the hits have been reputational rather than material -- like the decision to liquidate a product that allowed investors to bet against volatility. There was no trading loss on that, according to Thiam. He won’t always be so lucky.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Edward Evans is a managing editor with Bloomberg Gadfly. He is former managing editor for European finance at Bloomberg News.

To contact the author of this story: Edward Evans in London at eevans3@bloomberg.net.

To contact the editor responsible for this story: James Boxell at jboxell@bloomberg.net.

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