Vertical Theme, a Malaysian holding company, is considering selling its roughly 29% stake in Alliance Bank to Singapore’s biggest lender, DBS Group Holdings Ltd, the people said, asking not to be identified because the deliberations are private.

Under local rules, Vertical Theme needs to submit an application to Malaysia’s central bank to start any talks.

If a deal goes through, DBS may consider raising its stake in Alliance to up to 49% via a voluntary partial general offer, the people said.

A deal for Alliance would give DBS a foothold in Malaysia, where Singaporean rivals Oversea-Chinese Banking Corp and United Overseas Bank Ltd already have an established presence.

Singaporean state investor Temasek Holdings Pte owns 49% of Vertical Theme via Duxton Investment & Development Pte Ltd, while the remainder is held by RRJ Capital founder Richard Ong, hotelier Ong Beng Seng and corporate adviser Seow Lun Hoo through Langkah Bahagia Sdn Bhd.

Temasek also has a 31.9% stake in DBS, data compiled by Bloomberg show.

Deliberations are ongoing and Vertical Theme may decide not to pursue a transaction, the people said.

A representative for DBS declined to comment. Shareholders of Vertical Theme including Temasek, Ong and Seow declined to comment.

Outgoing DBS CEO Piyush Gupta has said that Malaysia, India and Indonesia are key targets for expansion.

Among recent moves, DBS has made an initial proposal to buy PT Bank Pan Indonesia, Bloomberg News reported in December, while it has also received regulatory approval to increase its holding in its Chinese securities venture to 91%.

Tan Su Shan will succeed Gupta as CEO in March.

Reuters reported in November that DBS was exploring expanding into Malaysia, including via stake purchases in banks such as Alliance Bank.

Alliance Bank has a market value of RM7.6 billion (US$1.7 billion) after its shares climbed 44% in 2024.

DBS rose almost 50% in Singapore in the past 12 months and is currently valued at about US$91 billion.