Malaysia currently caps foreign ownership of commercial banks at 30%, but there has recently been talk of the government relaxing the limit in some sectors, the people said. if DBS cannot get a green light to buy as much as 49% of the Malaysian lender, one of the people said. Considerations are ongoing and no final decisions have been made, the people said. Representatives for DBS and Vertical Theme’s backers declined to comment, while Alliance Bank said it had no knowledge on the matter.
DBS Group Holdings Ltd.’s plan to buy a stake in Alliance Bank Malaysia Bhd. has stalled as Singapore’s biggest bank has yet to get regulatory approval to commence talks, according to people with knowledge of the matter. DBS and Alliance’s largest shareholder Vertical Theme Sdn. submitted separate applications to Malaysia’s central bank about eight months ago but haven’t heard back from the regulator, said the people, asking not to be identified because the process is private. Local rules require them to seek approval to start discussions.
Bloomberg News reported in January that Vertical Theme — a Malaysian holding company backed by Singapore state investor Temasek Holdings Pte — was considering selling its 29% stake in Alliance Bank to DBS. If a deal goes through, DBS may want to raise its stake in Alliance to as much as 49% via a voluntary partial general offer, the people said.
