(Reuters) -DBS Group’s effort to acquire a stake in Alliance Bank Malaysia has hit a snag as Singapore’s largest bank awaits regulatory approval to begin discussions, Bloomberg News reported on Tuesday, citing people familiar with the matter.
Vertical Theme, the largest shareholder in DBS and Alliance Bank, filed separate applications with Malaysia’s central bank about eight months ago but have yet to receive a response, Bloomberg News reported, adding that local rules require them to seek approval to start discussions.
DBS declined to a Reuters request for comment, while an Alliance Bank spokesperson said in an emailed response that the bank had no knowledge on the matter.
Reuters reported in November that DBS was exploring the purchase of Singapore state investor Temasek’s 29.1% stake in Alliance Bank Malaysia, a slice which was valued at around $460 million.
DBS is the only Singaporean bank without a retail banking presence in Malaysia. Local rivals Oversea-Chinese Banking Corporation and United Overseas Bank both have retail banking operations in Malaysia.
If the deal proceeds, DBS could look to raise its stake in Alliance to as much as 49% through a voluntary partial general offer, according to the Bloomberg report.
Malaysia currently limits foreign ownership of commercial banks to 30%, though there has recently been talk of the government easing the cap in some sectors, the report said.
(Reporting by Roshan Thomas in Bengaluru; Editing by Rashmi Aich and Harikrishnan Nair)
