UBS, you might remember, has been making some key changes to its top brass in the Middle East, whilst waxing lyrical about the region’s growth potential. Despite this, the bank has yet to kick-start the long-awaited expansion.

The Swiss bank currently employs 127 people in the Middle East and Africa, according to its Q2 2010 report released today, which is actually an 11% drop on this time last year when it had 143 staff.

In June, UBS appointed Anthony Iliya as chief executive for the Middle East and North Africa, based in Dubai. He replaced Per Larsson, who left to pursue other opportunities.

Chris Niehaus was also promoted to chief executive of the investment bank in MENA. At the time, Alex Wilmot-Sitwell, group chairman and executive for EMEA, described the Middle East region as a key, strategic growth market for the bank.

This assertion has obviously yet to be reflected in increased regional headcount. In fact, it’s been gradually shrinking over the last year.

Part of the reason may be that the bank still has work to do after slipping out of the top ten by investment banking revenues in the region during 2009.

According to the latest Thomson Reuters Middle East investment banking analysis, UBS doesn’t feature in the top ten fee league tables for equity capital markets, debt capital markets or M&A for the first half of 2010.

However, there are reasons to believe this will be a short-term phenomenon, in M&A at least. In terms of announced any Middle Eastern involvement M&A advisor rankings, UBS is second – up four places year-on-year and with a market share of 38.2%.

Elsewhere, the bank’s second quarter results were comparatively positive. It pulled in profits of SFr2.01bn – a 9% drop on Q1, but a complete turnaround on the SFr1.4bn loss posted this time last year. UBS was buoyed by strong performance in its investment bank.