The bank lost SFr2.2bn (£1.5bn) in the three-month period, compared with a profit of SFr 435m in the previous quarter.
The firm’s own-credit charge of SFr863m compared with a SFr239 gain in the second quarter.
But even that hit was swamped by the SFr3.1bn impairment loss related to goodwill and other non-financial assets associated with its investment bank.
Excluding those costs, the bank made a pre-tax profit of SFr1.4bn, with interest and trading revenues improving and net fee and commission income up.
Wealth management profits hit SFr600m, up almost 20 per cent on the quarter, and asset management profit edged up to SFr124m.
Retail and corporate profits rose a fraction to SFr409m, with strong deposit growth offset by tight margins in the low interest rate environment.
UBS also increased its fully applied Basel III core tier one common equity ratio from 8.8 per cent to 9.3 per cent, well ahead of its peers.
“From this position of strength we are now able to take further decisive action to transform the firm and position it for future success,” said chief executive Sergio Ermotti as he announced plans to trim investment banking operations.
The bank added that the move will cut its risk-weighted assets by more than SFr20bn.
UBS’s shares jumped 5.87 per cent on the day.