UBS said today that it expects to swing back into profit in the third quarter, putting an end to a string of losses when it was forced to make huge writedowns of bad assets.

Shares in Switzerland's biggest bank soared by 9.3 per cent to SwFr21.54 today on the expectation, which preceded its extraordinary meeting when it is expected to announce it is axing between 1,900 and 2,000 staff from the investment banking division’s 19,000-strong workforce.

UBS has been forced to dismiss 7,000 staff since the credit crunch began.

Analysts have also predicted that the bank will announce writedowns of around $3.8 billion in the second half.

UBS made its first full-year loss last year, followed by two successive quarters of losses this year after writing down more than $42.5 billion (£23.8 billion) worth of sub-prime-related assets when the financial market crisis set in.

However, in a statement before the meeting, the bank gave no details of potential job cuts or whether it would need to make further writedowns.

“Despite recent extremely volatile market conditions, UBS currently expects to report a small profit for the third quarter,” the bank said in the statement, saying that it expected 2009 would be an profitable year overall.

It added it had also “substantially reduced” its US commercial and residential mortgage-related positions, mainly through disposals and had “a remediation plan to address the lessons learned from the credit crisis”.

At the meeting, shareholders will vote on plans to abandon UBS’s one-bank strategy and run its investment banking, wealth management and asset management businesses as separate divisions.

The bank is due to announce its third quarter results on November 4.

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