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DBS Revises Malaysia Bank Bid to 30%
25 Nov
Summary
- DBS Group Holdings resubmitted a proposal to acquire 30% of Alliance Bank Malaysia.
- The initial bid for a 49% stake was not approved by the Malaysian central bank.
- This revised offer aligns with foreign ownership regulations, increasing approval chances.
DBS Group Holdings has submitted a revised proposal to acquire a stake in Alliance Bank Malaysia, now targeting up to 30% ownership. This move comes after the Singapore-based bank's initial application to acquire a 49% stake was reportedly not approved by Bank Negara Malaysia, the country's central bank. The revised bid adheres to Malaysia's regulatory limits on foreign ownership in financial institutions, which typically cap at 30%, thereby increasing its prospects for approval.
The initial proposal by DBS, Southeast Asia's largest bank by assets, would have necessitated a special waiver from the Malaysian central bank. With the new submission, DBS aims to bypass this hurdle and secure a foothold in the Malaysian banking sector. If successful, this acquisition would enable DBS to initiate discussions with Vertical Theme, Alliance Bank's largest shareholder, which is backed by Singapore's state investor, Temasek Holdings.
A successful transaction would allow DBS to compete more directly with Singaporean rivals like Oversea-Chinese Banking and United Overseas Bank, which already have established presences in Malaysia. Alliance Bank currently holds a market capitalization of approximately RM7.7bn ($1.9bn), making it a significant target for DBS's expansion plans in the region.
