UBS has posted some rather ugly Q3 results – recording its fourth successive quarterly loss, this time of $550m. But amid talk of accounting charges and ongoing headcount cuts, comes the revelation that its promised Middle Eastern expansion hasn't really come to fruition.

The bank still has a little way to go to reach its headcount target of 65,000 by 2010 – it currently stands at 69,023, having shrunk by 2,783 this quarter.

The good news is that the Middle East operations have escaped the axe, with current full-time employee numbers standing at 139 – the same figure as this time last year. However, its promised expansion plans simply haven't materialised.

To recap, UBS's former Middle East CEO, Peter Burnett, said in the relatively halcyon days of June last year that it intended to double investment banking headcount in the region, and when kick-starting its Saudi operations the intention was to add 20-25 staff.

However, since Per Larsson's appointment as CEO for the MENA region in July last year, recruitment appears to have been muted. UBS did not return requests for comment, but investment banking headhunters in the region tell us that hires at the bank have been few and far between.

"It's no secret that it's punching below its weight in the region, and it's not entirely clear why," said one executive search firm director. "It's talked of expansion, but aside from a few key hires it's done very little recruitment."

One such key hire was Armen Papazian, who was appointed head of Islamic finance in March. Here, the bank does appear to be making a little headway in the GGC – UBS is among the key advisers on Dubai's anticipated $6.5bn bond issuance.