UBS expects to make a small profit in the third quarter in the first hint from any bank about how the battered sector traded through recent weeks of unprecedenced turbulence in financial markets.

Shares in the Swiss bank rose more than 10 per cent before closing up just over 8 per cent at SwFr21.30 as investors took comfort from the update, which was delivered at a shareholder meeting in Basel to approve new board members and strategy.

Peter Kurer, the bank’s chairman, said yesterday that UBS had fared “reasonably well through this turmoil of the last weeks”. He said that 2009 would be an “overall profitable year” despite what he described as an extremely precarious situation in the markets. The bank will pay a dividend again in 2010, Mr Kurer promised.

The Swiss bank has endured an agonising year, in which it reported its first loss in nine years. Its shares hit a ten-year low on September 16, after Lehman Brothers’ collapse, and are still two thirds lower than their price a year ago.

However, analysts at Morgan Stanley said that yesterday’s announcement could signal a turning point for UBS, with interest switching from the bank’s writedowns to its earnings power. UBS has been the European bank worst hit by the credit crunch, with almost $42 billion (£24 billion) in writedowns.

Analysts at Dresdner Kleinwort gave a warning to investors that there was little detail about the profits, which they said could have come from “low quality” items such as gains in the bank’s own debt or tax credits.

“Somewhat conspicuously, there is no hint at all about the development of client money flows in wealth management,” Dresdner said.

UBS is due to report its third-quarter figures on November 4. “We want to be an accepted industry leader again,” Mr Kurer said. He said that the bank had already substantially reduced its exposure to US commercial and residential mortgage-backed investments by selling the assets.

UBS was embarrassed by its huge losses in the credit crunch, which led to its chairman and the chief executive of its investment banking business leaving the company.

Rich clients — the bread and butter of the Swiss giant — have fled the bank in fear of losing their cash should it collapse.

The bank this year published a report that listed the catalogue of errors it made in the lead-up to the liquidity freeze, including paying huge bonuses for short-term performance, ignoring warnings from its risk experts and placing too much reliance on overbearing staff members.

It is also still in talks with American authorities over accusations that UBS advisers helped US clients avoid tax via offshore vehicles.

Yesterday shareholders voted 99.27 per cent in favour of a new strategy for the bank, which will abandon its “one-bank” policy and operate as three trading divisions: wealth management, asset management and investment banking. Mr Kurer said that substantial progress had been made on the programme of change, including altering the way the bank measures risks.

UBS yesterday gave no new information on the scale of any further writedowns, which analysts have estimated will be about $2.7 billion for the third quarter.

Marcel Rohner, the chief executive, declined to comment on expected job cuts, which could come to as many as 2,000 in investment banking, equities and fixed income. The bank has already announced 7,000 staff cuts.

Mr Kurer said only that headcount and operating costs were in the process of being reduced.

The chairman said that resolving the US tax allegations was a top priority. “Some facts of this case involved behaviour by employees of ours which we do not and will not tolerate,” Mr Kurer said.

He said that the bank would stop offering as quickly as possible offshore banking services for American clients that fell outside of US tax control.

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