KUALA LUMPUR, DBS Group Holdings Ltd’s plan to acquire a stake in Alliance Bank Malaysia Bhd (KL:ABMB) has reportedly stalled, as Singapore’s largest bank has yet to receive regulatory approval to begin formal discussions, according to people familiar with the matter.
Both DBS and Alliance Bank’s largest shareholder, Vertical Theme Sdn Bhd, submitted separate applications to Bank Negara Malaysia (BNM) about eight months ago but have not received any response, the people said. Under local regulations, approval is required before talks on a potential deal can proceed.
Bloomberg News reported in January that Vertical Theme — a Malaysian holding company backed by Temasek Holdings Pte Ltd — was weighing the sale of its 29% stake in Alliance Bank to DBS.
If approved, DBS may seek to raise its stake to as much as 49% through a voluntary partial general offer, the people said. While Malaysia currently caps foreign ownership in commercial banks at 30%, there has been speculation about potential relaxation of the limit in selected sectors.
One source noted the deal would be unlikely to move forward if DBS cannot secure approval for a 49% stake. Discussions remain ongoing and no final decision has been made. Representatives for DBS and Vertical Theme’s investors declined to comment. Alliance Bank said it was not aware of any such matter.
BNM, in response to queries, reiterated its policy of not commenting on specific applications regarding acquisitions or disposals of interests in regulated entities. The central bank said all applications involving licensed banks — including those by foreign parties — are assessed under the Financial Services Act 2013 and Islamic Financial Services Act 2013.
A successful deal would expand DBS’ presence in Malaysia, where rivals Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank Ltd (UOB) already operate extensively. DBS is Southeast Asia’s largest bank by total assets.
Vertical Theme is 49% owned by Temasek through Duxton Investment & Development Pte Ltd, with the remainder held by RRJ Capital founder Richard Ong, hotelier Ong Beng Seng, and corporate adviser Seow Lun Hoo via Langkah Bahagia Sdn Bhd. Temasek is also DBS’ single largest shareholder, with a 28.3% stake.
Shares of Alliance Bank have fallen 4.8% year-to-date, broadly in line with Kuala Lumpur’s benchmark index. The lender’s market capitalisation stands at about RM7.8 billion (US$1.8 billion).
