WHEN Oswald Grübel took the helm at UBS in February 2009, he quickly made a rod for his own back by setting gruelling targets. The bank would be booking at least SwFr15bn (£9.7bn) in annual profits sometime between 2012 to 2014, he said. After yesterday’s disastrous results, such a target seems laughably bullish.

There were few glimmers of hope in the Swiss bank’s third quarter numbers. According to analysts at Merrill Lynch, underlying pre-tax profit excluding non-recurring items came in at SwFr986m, compared to analyst consensus of SwFr1,888m. That is a simply staggering miss of 48 per cent.

The main culprit was the investment bank, which missed pre-tax profit consensus by SwFr600m. Trouble in the Fixed Income Currencies and Commodities (FICC) arm saw revenues of SwFr969m against expectations of around SwFr1,379m. The Corporate division also put in a lacklustre performance, with pre-tax profits coming in around SwFr200m.

There was some good news at the wealth management division, where UBS hailed a recovery in new inflows. The Swiss bank pulled in SwFr900m of net new money compared to outflows of SwFr5.5bn in the previous quarter, while the Americas bank secured SwFr300m of new money, against SwFr2.6bn of outflows a quarter earlier.

It’s worth remembering that UBS will struggle to keep this up in future quarters, however, as the UK and others line up to extract tax revenues from Swiss bank account holders. This new money also came at the expense of weaker margins, which fell from 94 basis points in the second quarter to 88 basis points. Consequently, wealth management missed expectations for pre-tax profit by SwFr100m.

Excepting a remarkable turnaround in its fortunes, Grübel’s targets look more elusive than ever. He should start trying to manage expectations as soon as he can.