Regulatory scrutiny delays DBS' move to buy stake in Alliance Bank
In a recent development, the proposed purchase of a stake in Alliance Bank by DBS Group has been put on hold. The Singaporean bank, valued at approximately US$1.8 billion, had expressed interest in acquiring a significant share in the Malaysian bank, which would give DBS its first retail foothold in the country.
However, according to reports by Bloomberg, the deal is currently on hold due to the awaiting clearance from Bank Negara Malaysia, the central bank of Malaysia. This news comes as authorities in Malaysia have been discussing the possibility of easing the foreign ownership limit in Malaysian banks, currently capped at 30 percent.
Alliance Bank, which has shed 4.8 percent in market value this year, is currently owned by Vertical Theme, the biggest shareholder of the bank. Vertical Theme, backed by Temasek Holdings, owns about 29 percent of Alliance Bank. DBS had considered raising its stake in Alliance Bank to nearly 49 percent, but no comments have been made by either DBS or Vertical Theme regarding the potential easing of the foreign ownership limit in Malaysian banks.
The applications for clearance were filed by DBS and Alliance's biggest shareholder, Vertical Theme, eight months ago. However, no response has been received from Bank Negara Malaysia regarding the applications. Alliance Bank said it was unaware of any deal in progress.
The search results do not provide information about who is leading the negotiations for the sale of shares to Alliance Bank in Malaysia. Rivals OCBC and UOB already operate in Malaysia, and the potential acquisition by DBS could shake up the Malaysian banking landscape.
The featured image for this article was edited by the website, based on an image by Alliance Bank. DBS and Vertical Theme declined to comment on the potential deal. No further details about the reasons for the hold or the timeline for a potential decision are provided in the article.
As the situation develops, more information is expected to be released regarding the potential deal and the clearance process. Stay tuned for updates on this story.
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