The rating agency Standard & Poor’s said it may cut the counterparty ratings on UBS due to fears about the Swiss bank’s future earnings.

UBS’s AA-/A-1+ counterparty credit ratings were put “on CreditWatch with negative implications”. “These rating actions reflect doubts about UBS' earnings capacity and franchise prospects in the challenging conditions that are likely to persist across its core markets in the medium term,” S&P said in a statement.

It said the Swiss government’s recently announced support package for UBS – in which the bank will offload $60 billion of toxic assets – was a “positive measure”.  The package “caps losses on UBS’ least liquid assets and should materially improve the confidence of customers and investors”, the rating agency said.

“We consider UBS to be of high systemic importance within the Swiss banking system, and the support package confirms our view of the Swiss authorities as supportive,” it said,  adding,  “However, the rebuilding of UBS' reputation – crucial for its wealth management franchise - and restructuring of its investment bank are long-term processes.”