By Anshuman Daga and Sumeet Chatterjee
SINGAPORE/HONG KONG (Reuters) – UBS has instructed its senior managers to prioritise concerns raised by its rich clients from China, after a bank economist’s “Chinese pig” comment in connection with food price inflation in the country kicked up a row, sources said.
The reference to pigs was made in an inflation analysis podcast by UBS global chief economist Paul Donovan, who has since been put on a leave of absence by the bank as it reviews the matter. The podcast too has been taken down.
The Swiss private banking giant has asked its senior client advisers to call or even meet customers from China, a key market for UBS, to explain its position on the remark and actions taken so far, the people told Reuters.
“That’s the priority for all the senior RMs (relationship managers) and managers in Hong Kong and Singapore now, just to make sure the clients don’t get swayed by the reactions mostly in the social media,” one of the people said.
“Most of the clients understand and appreciate the actions the bank has taken and they are not going to drop the bank over this, but they do ask questions.”
These efforts come after some industry participants rejected UBS’ apology last week for Donovan’s remarks, criticising it for a lack of cultural awareness and calling for a boycott.
Donovan had said in the podcast that consumer prices in China had risen mainly due to sickness among pigs. “Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China,” he added, in comments some took offence at because of a perceived reference to people.
UBS lost a lead role on a U.S. dollar bond deal for state-backed China Railway Construction Corp this week, and according to a bank source the decision was taken because of the controversy over the comment.
But UBS has not yet seen any Chinese private banking client exits as a result of the controversy, one of the people said.
The Hong Kong Monetary Authority (HKMA), the banking sector regulator, has also contacted UBS over the incident and asked the bank to keep it informed about the internal investigation, another person said, without giving details.
HKMA did not immediately respond to a request for comment.
A spokesman for UBS in Hong Kong declined to comment.
China is one of the most important markets for UBS, where the bank’s offerings include asset management, and investment and private banking. UBS was the first, in November, to win approval to control its onshore securities joint ventures.
Bulk of the assets managed by private banks in Asia comes from China that mints two new billionaires every week. With $357 billion of assets, UBS was the top wealth manager in Asia last year, as per Asian Private Banker league table.
UBS saw net new money inflows of $16.3 billion in Asia Pacific over January-March, versus $3.2 billion in Switzerland and $2.9 billion in Europe, the Middle East and Africa.
(Reporting by Anshuman Daga and Sumeet Chatterjee; Editing by Himani Sarkar)