‘Chinese pig’ remark lands UBS in trouble as state firm excludes Swiss bank from bond sale
- China Railway Construction Corp decides against hiring UBS
- UBS economist Paul Donovan made the ‘Chinese pig’ comment in an analysis of the country’s African swine fever epidemic, but has since apologised for the culturally insensitive language
One of China’s biggest state-owned infrastructure companies excluded UBS Group from a bond deal after the bank’s global chief economist sparked a furore with his use of the phrase “Chinese pig”.
China Railway Construction Corp decided against hiring UBS as a joint global coordinator on a dollar-bond sale, a CRCC spokesman said. The decision was prompted by last week’s pig remark, sources said earlier. UBS declined to comment.
CRCC is the first known corporate issuer to distance itself from UBS over a drama that has captivated financial professionals around the world and threatened to complicate the Swiss bank’s push into Asia’s largest economy.
While lost fees from the deal will have a negligible impact on the bank’s bottom line, the signalling effect from a major state-owned company is potentially more concerning as UBS tries to prevent the uproar from damaging its investment-banking and wealth-management businesses.
The stakes are high for UBS, which has had a presence in China longer than most Wall Street firms and was the first foreign business to win approval for a majority shareholding in a local securities venture after the country relaxed ownership rules.
Most wealth managers still serve China’s rich from offshore centres such as Hong Kong and Singapore, but the nation’s massive pool of onshore money, estimated at around US$20 trillion, is a huge prize for the industry.