DBS Group Holdings revised Alliance Bank stake proposal after its initial application to acquire up to 49% of Alliance Bank Malaysia was not approved by the Malaysian central bank, reported Bloomberg, citing individuals familiar with the matter.

The Singapore-based bank has now submitted a new request to acquire up to 30% of Alliance Bank, aligning with the country’s regulations for foreign ownership in financial institutions.

The initial request by DBS, which is Southeast Asia’s largest bank by total assets, would have required a waiver from Bank Negara Malaysia, as the standard limit for foreign ownership is 30%.

The revised proposal is expected to have a higher probability of approval from the central bank, according to people with knowledge of the situation who requested anonymity due to the private nature of the information.

In September, Bloomberg reported that DBS Group’s intentions to acquire the 49% stake in Alliance Bank Malaysia encountered delays due to the absence of regulatory approval. 

If the latest proposal is approved, it would enable DBS to begin discussions with Alliance Bank’s largest shareholder, Vertical Theme, a Malaysian holding company supported by Singapore’s state investor Temasek Holdings.

Through Duxton Investment & Development, Temasek owns a 49% stake in Vertical Theme. Temasek also holds approximately 28.3% of DBS.

Representatives from DBS and Vertical Theme have declined to comment on the development. An Alliance Bank spokesperson said the company was not aware of the matter, while Bank Negara Malaysia has not yet responded to requests for comment, reported the media outlet.

A successful transaction would provide DBS with access to the Malaysian banking sector, where Singaporean competitors Oversea-Chinese Banking and United Overseas Bank already operate.

Alliance Bank currently has a market capitalisation of about RM7.7bn ($1.9bn).