03/03/2025

BIZ & FINANCE MONDAY | MAR 3, 2025

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CIMB Group targets 5-7% loan growth for this year

SC and MCMC step up cooperation to

Another common example that would trigger customs duties and sales tax on importation could be a change of the customs harmonised system codes if the imported goods change their character, for example from complete knocked down to complete built up. Another area could trigger customs duties is where the re organisation involves a change in the supply chain and consequently it may affect the relief accorded under the preferential tariffs of the respective free trade agreements. There are many other areas of taxation which needs to be carefully analysed to determine the cost of the restructuring. If the analysis is done correctly, there are opportunities to mitigate this cost. This article is contributed by Thannees Tax Consulting fight online scams PETALING JAYA: The Securities Commission Malaysia (SC) and the Malaysian Communi cations and Multimedia Commission (MCMC) will step up cooperation to combat the growing threat of online scams. The joint initiative will help enhance protection of Malaysia investors and consumers, the two regulators said following a high-level meeting held recently to address the growing proliferation of scams and unlicensed activities. Advancements in technology have seen an exponential rise in scams and unlicensed activities over online platforms. In 2024, the SC received 4,859 public complaints and enquiries on scams and unlicensed activities. Online service providers with the assistance of MCMC took down 66,507 contents related to scams in 2024. Between Jan 1 and Feb 26 this year, there were 19,200 scam-related contents taken down. The SC said in a statement the areas of collaboration include strengthening en forcement and scam prevention and leveraging on artificial intelligence capa bilities.“The SC and MCMC will work closely with service providers and relevant stakeholders to expedite scam detection and speedier content takedowns.” SC chairman Datuk Mohammad Faiz Azmi said given the constantly evolving tactics and types of scams, the close working relationship with MCMC will pave the way for better coordination in re sources and measures towards scam detection, prevention and enforcement. MCMC chairman Tan Sri Mohamad Salim Fateh Din said it is strengthening online safety through a multi-faceted approach involving high impact regulatory initiatives, multi-agency collaboration and coordi nation and promoting public awareness. Its collaboration with the SC enhances infor mation sharing, development of strategic polices, and scam prevention efforts. The two parties will also explore opportunities to streamline coordination, ensuring rapid response against online scams, fraudulent investment schemes and financial cybercrimes.

o Expansion will be underpinned mainly by operations in Indonesia and Malaysia

Novan (left) and CIMB Group chief financial and strategy officer Khairul Rifaie at a press conference on the banking group’s FY24 financial results.

Ű BY JOHN GILBERT sunbiz@thesundaily.com

KUALA LUMPUR: CIMB Group Holdings Bhd is targeting 5-7% loan growth in 2025, marking a stronger pace compared to the previous year. The banking group’s loan growth will be largely fuelled by Indonesia, where growth is projected within the same 5-7% range. Malaysia is also expected to gain momentum with loan growth estimated at 5-6%. Additionally, CIMB Group’s Thailand and Singapore operations are showing signs of acceleration, further supporting the group’s positive outlook for 2025. Group CEO Novan Amirudin said enhancing operations in Thailand remains a key focus for the group, adding that a sharper approach to client segmentation is essential to better serve the right banking clients. “Despite challenges, the group remains fully committed to Thailand, as it plays a crucial role in completing its Asean network, particularly in wholesale banking. Many Thai corporates are actively expanding across Southeast Asia, with significant investments in Malaysia, Singapore, and Indonesia, and the group continues to support them across these markets. “Thailand is more than just a local market. It is a strategic part of the group’s regional presence. However, improving operational efficiency remains a priority to achieve better outcomes in the country,” he told reporters at CIMB Group’s FY24 financial results briefing on Friday. Novan noted that Thailand’s economic growth remains sluggish, with gross domestic product expanding by only 1-2%, both last year and in current forecasts. He said several factors contribute to this slow momentum.

(NII) and non-interest income (NOII). NII was up 5.3% YoY to RM15.40 billion, driven by healthy loan growth, while NOII grew 8.1% YoY to RM6.90 billion driven by strong client franchise business and trading income, improving NOII ratio to 31.0%, up 60bps YoY. CIMB Group proposed a second interim dividend of 20 sen per share, bringing the total proposed annual dividend to 47 sen per share. This translates to a record total dividend payout of RM5.04 billion. CIMB Group’s total gross loans saw a solid 4.8% YoY growth, aligning with market trends. As part of its deposit-led strategy, total deposits increased by 5.2% YoY, while current account savings account (CASA) balances rose by 7.7% YoY, bringing the CASA ratio to 43.1% as of December 2024. “Moving into 2025, CIMB Group will remain cautious in our outlook and be vigilant in navigating external and geopolitical uncer tainties. “While challenges persist, we expect resilience across our Asean markets where we operate and anticipate our core financial performance to continue on a positive trajectory, in tandem with profitability priori tisation without compromising investments and resiliency,” Novan said.

“One key issue is the lack of a major investment cycle in recent years. Previously, Thailand saw significant investments in the automotive and petrochemical sectors, but these industries now face mounting challenges. “For instance, the US tariffs on Chinese EVs have forced excess supply into Southeast Asia, indirectly affecting Thailand’s auto sector. Meanwhile, tourism, a crucial driver of the Thai economy, has shown signs of recovery. However, visitor numbers have yet to return to pre-pandemic highs. “Given these factors, Thailand remains a difficult market, facing structural headwinds that continue to weigh on its economic outlook,” he said. CIMB Group achieved a strong financial performance with net profit of RM7.73 billion, up 10.7% for the financial year ended Dec 31, 2024 (FY24), compared to RM6.98 billion in FY23. Profit before tax increased 9% YoY to RM10.4 billion, translating to earnings per share of 72.3 sen. The results led to a significant improvement in return on average equity to 11.2%, up 50bps YoY. Further, CIMB Group’s FY24 operating income rose 6.1% YoY to RM22.3 billion, contributed by growth in net interest income

Tax should not be an afterthought in business restructuring

BUSINESS restructuring in Malaysia involves numerous tax consi derations that needs to be carefully managed to avoid unintended general income tax matters such as de ductibility of expenses, tax losses, capital allow ances, transfer pricing, withholding taxes, real property gains tax, capital gains tax, stamp duty, sales and service taxes, customs duties, tax incentives, employment taxes, Employees Provident Fund and social contributions, and other employee related taxes, dividend and distri bution taxes, foreign taxes, etc. The most common types of restructuring will involve mergers, demergers, or reorganising business structures. It can also involve spinoffs into new companies or divestures of part of the operations. In most cases, the commercial considerations take the prime spot tax consequences which can be costly. This includes

companies, trusts, limited liability partnerhips and cooperatives must consider capital gains tax. Throughout the reorganisation, any legal document produced needs to be stamped although in certain cases, you can explore opportunities within the law to benefit from the exemptions or remissions. In most group reorganisations, you cannot forget transfer pricing because inevitably you will find that there are transfer prices involving goods, services, financing, and the use of intangibles via royalty payments. Any reorganisation of these prices must meet the arm’s length test, otherwise there will be additional taxes and surcharges. The most common tax area that is forgotten is indirect taxes such as sales tax, service tax, and customs duties. An example would be the imported service tax for services imported from overseas such as payments made to digital companies overseas or between cross-border related parties.

while the transaction is being executed, the opportunity for miti gating the taxes will not be missed. It is important to be able to show the tax authorities in any future audits that the business restructuring was undertaken primarily for commercial reasons and obtaining a tax benefit is a natural consequence of the transaction. Issues for consideration The starting point would be to ensure that maximum deduction is obtained for the operating expenditure and capital expenditure. Throughout the restructuring, the timing of the tax deduction or taxation of the income is also im portant. On the revenue side, decisions must be made to dis tinguish between capital versus revenue for income tax purpose. If there is a transfer of land related assets, attention needs to be paid to real property gains tax. With the introduction of capital gains tax, sales of unlisted shares by

and supported by the legal counsel who will execute the intention of the parties. Unless the financial advisers and legal advisers are aware of the tax implications, the tax liabi lities will come as a surprise at a later date. Once the arrangements and agree ments have been signed and executed, it will be difficult to reverse or reorganise the transactions to mitigate the adverse tax consequences. Tax should not be an after thought as subsequent tax liabilities will be significant as the income tax rate is usually 24%, withholding tax can range between 10% and 15% of the gross payment, sales and service tax can range between 5% and 10%, and stamp duty could go up to as much as 4% of the transaction value or market value. Mispricing of the transfer prices could give rise to a 5% surcharge on any future adjustment. If the tax issues are analysed simultaneously

Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).