Analysts had predicted a third consecutive quarterly loss this year. The Zurich based bank however, had posted a net profit of 283 million francs in the same period last year.
Discounting the charges, the bank would have made a pre-tax profit of 1.56 billion francs.
Looking for signs of recovery
UBS operating income escalated by 4 percent due to high trading gains, and stock showed a fairly good performance. After rising by 17 percent this year, it gave the bank a market capitalization of $60 billion.
The bank said it did not expect an immediate recovery of inflows, the reason being the high accounting charges.
Net client outflows recorded were 36.6 billion francs, down from 39.4 billion francs in the previous quarter.
Analysts have been looking for signs of recovery at UBS's wealth management division, which has struggled to emerge from the subprime crisis.
Developments anticipated
The bank said in a statement, "Having stabilized the bank's financial condition and resized the business, UBS expects to see further progress in restoring the underlying profitability of the business in future quarters, particularly in 2010.”
"Business is steadily returning to normal," said chief executive Oswald Gruebel.
"Management actions are delivering visible results, and we are continuing to emphasize risk reduction and capital strength," he said.
UBS has also reduced its staff by 2,800 which now stands at 69000. Also the Swiss government's decision to end its stake in the bank would rebuild trust in the future.
A bank’s stability is measured by its capital adequacy ratio. The higher the ratio, the better is the performance of the bank. The ratio reached 15 percent at the end of September up from a 13.2 percent.
UBS expects its operations to stabilize in 2010 depending on the market conditions.
UBS’s rival, Credit Suisse posted a net profit of 2.4 billion francs last month.
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