By Marcus Leach
Swiss bank UBS is expected to unveil major job cuts after announcing radical plans to reduce costs by 2 billion Swiss francs ($2.5 billion; £1.2 billion) over the next two to three years.
Weaker trading and the increased value of the Swiss franc lead to UBS announcing a drop in quarterly profits.
Weak results had been expected, but not to the tune of net profit for the three months to the end of June being 1.015 billion Swiss francs. This marked a 49% drop to the same period in 2010.
The cuts mean that profits throughout the year are now expected to be much lower than first thought.
"We are responding to this changed environment and the weakening economic outlook by adapting our business and increasing efficiency," Oswald Gruebel, UBS chief executive, said.
"We therefore do not envisage material improvements in market conditions in the third quarter of 2011, particularly given the seasonal decline in activity levels traditionally associated with the summer holiday season, and expect these conditions to continue to constrain our results."
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