31/05/2025

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SATURDAY | MAY 31, 2025

‘Vape sales ban could be counterproductive’

CIMB Group posts steady Q1 performance,

strengthens Asean focus

o Such a move may hurt Bumiputera SMEs, fuel black market, say research expert and industry association head

PETALING JAYA: CIMB Group Holdings Bhd reported a net profit of RM1.97 billion for the first quarter ended March 31, 2025 (Q1’25), representing an mprovement of 1.91% from RM1.93 billion in the same quarter last year. Revenue decreased 2.31% to RM5.49 billion in Q1’25 from RM5.62 billion in Q1’24. Net interest income increased marginally quarter-on-quarter (q-o-q) and year-on-year (y o-y) to RM3.82 billion. Meanwhile, non-interest income (NOII) grew 11.1% q-o-q, driven by an 18.9% rise in treasury client sales and a 12.6% increase in fee and commission income. On a y-o-y basis, NOII contracted by 8.5% to RM1.68 billion, primarily due to lower sales of non-performing loans and proprietary trading. On a constant currency basis, CIMB’s total assets and gross loans increased by 5.1% and 4.4% y-o-y, respectively. The group’s deposit-led strategy continued to expand total deposits by 2.7% y-o-y, with total current account savings account (Casa) inflows growing 7.4% y-o-y. This boosted the Casa ratio to 43.8% as of March 2025, up from 40.8% recorded as of March 2024. The group’s growing Casa base and favourable funding mix helped lower the cost of funds by 4 basis points q-o-q and 11 basis points y-o-y. Prudent asset-liability management helped maintain a stable NIM of 2.16% in Q1’25 – unchanged from Q4’24 – despite interest rate cuts in Thailand, Indonesia and Singapore. The group’s cost-to-income ratio stood at 46.9% in Q1’25, attributed to sustained cost prudence, without compromising investments in technology and resilience. Meanwhile, total provisions remained at RM311 million, with credit cost improving to 26 basis points, compared to 35 basis points in Q1’24. The gross impaired loans ratio decreased by 40 basis points y-o-y to 2.2%, with additional forward overlays of RM100 million in Q1’25, resulting in a healthy allowance coverage ratio of 102.4%. The group continued to maintain a strong capital position, with Common Equity Tier 1 ratio at 14.7%. CIMB Group CEO Novan Amirudin said, “The first quarter performance underscores the continued strength of our diversified Asean portfolio with strong contributions across multiple income segments, particularly from our client franchise income, which has shown consistent growth since 2022. “We have maintained healthy asset quality and exercised disciplined cost controls to enhance resilience amid a dynamic operating environment.” During the quarter, CIMB Group transitioned its leadership in Thailand and Cambodia, and included Thailand, Cambodia and Singapore as part of the group’s growth markets, allowing it to sharpen its strategic focus and drive growth in priority segments. In the medium term, CIMB Group believes that the evolving global landscape will continue to present new opportunities, particularly in intra Asean trade, where the group’s integrated Asean franchise is poised to capitalise on growth prospects. The group is well positioned to navigate the ongoing market uncertainties, supported by minimal exposure to trade-related loans and clients with direct US export dependencies.

Ű BY JOHN GILBERT sunbiz@thesundaily.com

economic value, employing over 31,500 individuals, many of whom are Bumiputera entrepreneurs who operate small businesses. “A state-wide ban would not only collapse these businesses but also reduce retail tax contributions and sales-based state taxes. Instead of regulating and collecting revenue from legal players, Selangor risks pushing economic activity underground, where it is untaxed, unregulated and unsafe,” he added. Asked what alternative policy approaches Selangor could consider instead of a full sales ban, Pankaj said several data-driven alter natives to a ban can be considered. These include strict enforcement against illegal substances in vape liquids, particularly narcotics and banned chemicals, along with the introduction of retail licensing systems to ensure only approved outlets sell compliant products. “Implementing digital tracking and traceability can help verify that products are legally sourced and sold, while age-gated sales with ID verification at the point of purchase can prevent underage access. “Complementing these measures with health education campaigns will help counter misinformation and discourage youth usage. Together, these steps can create a transparent and accountable industry that supports national health objectives without driving growth in the black market,” he said. Recently, Selangor Menteri Besar Datuk Seri Amirudin Shari said the decision whether to ban vape sales in the state would be made after the public health committee chairman Jamaliah Jamaluddin presents a policy paper on the proposal to the state executive council. He said the state government will prioritise public health and future generations as it weighs the consequences of prohibiting vape products. Malaysia Retail Electronic Cigarette Association president Datuk Adzwan Ab Manas said the government should stay focused on enforcing Act 852 fairly and consistently. “Legal businesses are prepared to comply “Overall, the detailed breakdown of inter national reserves under the IMF SDDS format indicates that as of end-April 2025, Malaysia’s international reserves remain usable.” BNM said that for the next 12 months, the predetermined short-term outflows of foreign currency loans, securities, and deposits, which include, among others, scheduled repayment of external borrowings by the government and the maturity of foreign currency Bank Negara Interbank Bills, amounted to US$14.07 billion. “The net short forward positions amounted to US$24.04 billion as of end-April 2025, reflecting the management of ringgit liquidity in the money market,” it added. In line with the practice adopted since April 2006, the data excludes projected foreign

KUALA LUMPUR: There will be long-term implications, including potential job losses, particularly affecting Bumiputera entre preneurs and SMEs, if the Selangor government decides to impose a ban on the sale of vapes and e-cigarettes. Datametrics Research and Information Centre Sdn Bhd managing director Pankaj Kumar said other than that, there could be reduced state and federal tax revenues, increase in illegal product sales that may pose public health risks and continued regulatory uncertainty that could deter investment in both the industry and the broader retail sector. “A state-wide ban would be short-sighted and counterproductive. It undermines national legislation (Act 852), penalises law abiding businesses and opens the floodgates to black market activity,” he told SunBiz . When asked about risks that such a ban might worsen illegal trade or increase the circulation of unregulated vape liquids, Pankaj said, “Absolutely. We have seen this happen in other markets. “Bans tend to create a vacuum that bad actors quickly fill. The unintended conse quence of prohibition is the rise of unregulated trade, where products are not tested, labelled or taxed. “Malaysia already faces a tobacco black market valued at RM5 billion annually. A vape ban will only exacerbate this issue, making it more difficult for enforcement agencies to track and regulate consumption. “Worse, illicit vape products are often laced with narcotics, posing significant health risks to consumers and especially youth.” Pankaj said a vape ban in Selangor, a state with one of the highest retail and commercial concentrations in the country, would significantly disrupt a legal industry that currently supports thousands of jobs and micro-enterprises. He said based on data, the vape industry in Malaysia contributes RM3.48 billion in KUALA LUMPUR: Malaysia’s international reserve assets amounted to US$118.7 billion (RM504.4 billion) as of end-April, 2025, while other foreign currency assets stood at US$1.75 billion, according to Bank Negara Malaysia (BNM). The central bank said the detailed breakdown of international reserves provides forward-looking information on the size, composition and usability of reserves and other foreign currency assets, in accordance with the International Monetary Fund Special Data Dissemination Standard (IMF SDDS) format. It also provides the expected and potential future inflows and outflows of foreign exchange of the federal government and BNM over the next 12-month period.

Pankaj

Adzwan

with the rules. What undermines both public health and industry sustainability is the blanket ban on vaping at the state level. “These bans do not stop demand, they just push consumers to the black market. Proper regulation and enforcement, rather than prohibition, are the most effective tools to protect public health while supporting legitimate businesses,” he said. Adzwan pointed out that during a recent Parliament session, Home Minister Saifuddin Nasution Ismail highlighted a study con ducted by Universiti Sains Malaysia Hospital involving 152 students in Kelantan, where vape has been banned since 2016. The study found that among 152 students who vaped, 65% were vaping products mixed with magic mushrooms, which is considered more concerning than methamphetamine and syabu drugs. “This is strong evidence that a ban does not work,” he said. Adzwan stated that for legal vape players committed to compliance, the current regulatory framework under Act 852 is workable. “Many of our members, who include a significant number of Bumiputera entre preneurs and SMEs, have already submitted the necessary paperwork and are in the process of aligning with the law.

“However, the real threat now is from state wide bans. These bans disproportionately hurt legitimate businesses, especially smaller local entrepreneurs. The real issue is abuse of vape products, not the legal, regulated products being sold. The government should focus on cracking down on misuse and illegal substances, not punishing those who are playing by the rules,” Adzwan said. Malaysia’s international reserve assets at US$118.7b end of April

currency inflows arising from interest income and the drawdown of project loans, BNM said, adding that the projected foreign currency inflows amount to US$2.7 billion in the next 12 months. The central bank said the only contingent short-term net drain on foreign currency assets is government guarantees of foreign currency debt due within one year, amounting to US$419 million. “There are no foreign currency loans with embedded options, and no undrawn, unconditional credit lines provided by or to other central banks, international organisations, banks, and other financial institutions. “Bank Negara Malaysia also does not engage in foreign currency options vis-à-vis the ringgit,” it said. – Bernama