Haitong International Securities Group Ltd said it has cut ties with UBS Group AG, following a comment about Chinese pigs made by the Swiss bank’s global chief economist that was perceived by some as a racist slur.
Haitong International has suspended all collaboration with UBS, including corporate finance and trading, the Hong Kong-listed firm said in an email to Reuters on Friday.
“There is not a clear timetable on when to resume the collaboration, which is subject to the management’s decision,” Haitong International said.
Lin Yong, chief executive of Haitong International – the Hong Kong unit of Chinese brokerage Haitong Securities Co – announced the decision on his personal WeChat account, according to a Haitong employee who saw the post.
It was also announced in an email circulated among Haitong International staff, a second Haitong employee told Reuters.
A flippant reference to pigs in an inflation analysis by the economist caused a furor in China, with some in the financial community rejecting UBS’ apology and calling for a boycott.
Paul Donovan, global chief economist of the Swiss bank’s wealth management department since 2016, said in a podcast on Wednesday that consumer prices 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,” Donovan said.
Following the furor, UBS issued an apology.
“We apologize unreservedly for any misunderstanding caused by these innocently intended comments by Paul Donovan,” it said in a statement emailed to Reuters.
“We have removed the audio comment from circulation. To be clear, this comment was about inflation and Chinese consumer prices rising, which was driven by higher prices for pork.”
The bank also said it “takes this matter seriously” and was enhancing its “internal processes to avoid any recurrence of a similar situation”.
“We remain fully committed to investing in China.”
The Chinese Securities Association of Hong Kong (HKCSA), whose 124 member firms include offshore subsidiaries of Chinese brokerages and fund houses, said it was not aware if any other members were making a decision similar to Haitong International’s, when contacted by Reuters on Friday.
Haitong International’s Lin is the president of the HKCSA.
The association had demanded on Thursday that UBS dismiss Donovan and issue a formal apology from the board, while calling companies and individuals to consider carefully when it comes to conducting business with UBS.
“Regrettably, this information (UBS’ apology) is not only insincere, but also arrogant, again hurting the feelings of Chinese people,” it said in an open letter to the UBS board.
Lin did not respond to emails and telephone calls seeking comment. The Haitong employees were not authorized to speak to media and so declined to be identified.
When asked about Haitong International’s decision on Friday, UBS re-sent the apology it had previously issued without providing any further comment.
China is a key market for UBS in Asia.
Last year, it became the first foreign bank, under new rules, to be allowed to take majority control of its securities joint venture on the mainland.
(By Samuel Shen, Xiangming Hou and Ryan Woo)