UBS scraps earning goals after profit drops

Swiss bank UBS has revised its profit target for 2014 and announced cost cuts after net profit fell by almost half during the second quarter.

The Zurich-based bank says net profit attributable to shareholders fell to SFr1.02 billion ($1.27 billion) compared with SFr2 billion in the same period last year.

“We believe we will deliver higher profitability, our target for pretax profit set in 2009 is unlikely to be achieved in the original timeframe of three to five years,” a statement said on Tuesday.

Chief executive Oswald Grübel said returns had declined across the banking sector in the past 12 months due to increased capital requirements imposed on the industry.

Senior officials said the bank was planning cost cutting measures of up to SFr2 billion in the next three years. However they did not say how many jobs will be shed.

At the end of last year, the bank provided about 65,000 full-time jobs worldwide.

Earlier this month, the bank’s chairman, Kaspar Villiger, was quoted as saying cost-reduction programmes were inevitable.

The other major Swiss bank, Credit Suisse, is due to announce its Q2 results on Thursday.