ZURICH (Reuters) - Swiss bank UBS UBSG.S is axing high-paying investment banking staff after a disappointing performance at the division prompted a 16% slide in third-quarter net profit and put the group's 2019 profit goals further out of reach.

Chief Executive Sergio Ermotti, credited for rapidly turning UBS around after the financial crisis, announced a further $90 million in expected annual cost savings at the investment bank on Tuesday, following a prolonged performance dip which Ermotti described as unsatisfying even given a tough market.

An earnings beat in its core global wealth management unit helped offset a 59% adjusted profit decline in its investment bank, putting the group’s third-quarter net earnings of $1.05 billion ahead of analyst expectations.

Ermotti is running up against a number of headwinds in UBS’s core markets, as wealthy clients hold back from trading, negative rates eat into margins and investment banking activity remains muted.

The bank’s share price is down 16% over the past year, hitting a six-year low in August and edging back towards the level it was when Ermotti took charge in 2011.

In its investment bank a fall in M&A work meant its advisory revenue fell 21%, while equity and debt capital markets income were down 22% and 15% respectively. On the trading side equities revenue fell 7%, while foreign exchange, rates and credit revenue was steadier with just a 1% fall.

UBS said it expects to take restructuring expenses of around $100 million in the fourth quarter related to structural changes it is making to the business, run by co-heads Piero Novelli and Robert Karofsky.

Measures include streamlining and merging its securities and trading activities and reducing headcount.

OPERATIONAL GROWTH

The bank brought in net new money of $15.7 billion in its flagship wealth management business, as a sizeable jump in transaction-based income for the unit, newly under the joint management of long-time wealth management co-head Tom Naratil and former Credit Suisse star Iqbal Khan, saw a sizeable jump in transaction-based income, helped restore operational growth.

Shares in UBS opened 1.9% higher on wealth management strength.

While the group last year announced targets for a 15% return on common equity for the year and a 77% adjusted cost/income ratio, Ermotti in March hinted the bank faced a steep climb to attain the profitability increase implied by the targets.

Its return on common equity tier 1 (CET1) capital slid to 12.1% in the third quarter, bringing the return down to 13.8% for the first nine months, compared with 16.3% over the first nine months of 2018.

The bank’s net interest income fell 8% from a year ago, as negative interest rates in Switzerland and the euro zone made their mark.