DBS Group Holdings is located in the Central Business District of Singapore.
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Singapore’s largest bank DBS Group Holdings Limited The company is exploring expansion into Malaysia, possibly acquiring stakes in banks from its Southeast Asian neighbors, including one of the country’s smallest lenders by assets, two sources said.
DBS Bank is considering acquiring Singapore state investor Temasek’s 29.1% stake in Alliance Bank Malaysia Bhd, a stake currently worth about $460 million, two people familiar with the matter said.
Temasek Holdings is DBS’s largest shareholder, with a 28.9% stake, according to London Stock Exchange Group data.
Other options to expand into Malaysia include buying Kuwait Finance House’s Malaysian retail banking assets, worth more than $500 million, which have been put up for sale, one of the sources said.
However, sources said the deliberations were at a very early stage and any formal talks to acquire a stake in the Malaysian bank would need approval from either Bank Negara Malaysia or Bank Negara Malaysia.
The two sources declined to be named as talks about a possible acquisition are confidential.
“We do not comment on market rumors and speculation,” said a spokesman for DBS Bank, Southeast Asia’s largest bank by assets. Temasek declined to comment.
Alliance Bank, Malaysia’s second-smallest listed lender by total assets, and Bank Negara Malaysia did not respond to requests for comment after business hours on Friday.
Kuwait Financial Authority said the process of selling its retail banking portfolio in Malaysia was at a preliminary stage and could not share further information.
DBS is the only Singaporean bank without retail banking operations in Malaysia. local competitors OCBC Bank and UOB Both companies have retail banking operations in Malaysia.
DBS’s planned expansion into Malaysia comes as the Southeast Asian country’s economic outlook is improving, with new infrastructure projects and investments expected to lead to a surge in credit growth.
In the second quarter, Malaysia’s economy grew 5.9% for the year, the fastest pace in 18 months, as household spending, exports and investment increased. Its currency unit, the ringgit, has been Southeast Asia’s best-performing currency this year.
During outgoing Chief Executive Piyush Gupta’s 15-year tenure, DBS became a regional banking giant with acquisitions that built significant operations in markets such as China, India, Indonesia and Taiwan.
DBS Bank completes acquisition Citigroup’s Launched consumer banking business in Taiwan in August last year. In July, Gupta said DBS was looking for bolt-on acquisitions to support further strategic expansion in the region.
Susan Chen, head of institutional banking and deputy chief executive of DBS Bank, will succeed Gupta in March next year and become the bank’s first female leader. On Thursday, DBS Bank reported its highest-ever quarterly net profit for the July-September period, with fee income hitting a record high.
DBS last tried to acquire Temasek’s stake in Alliance Bank in 2012.
Sources with knowledge of DBS Malaysia’s plans said the Malaysian government under current Prime Minister Anwar Ibrahim has been more open and open to ideas and investments aimed at boosting economic growth.
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