Singapore’s largest bank, DBS Group Holdings Ltd., has adjusted its strategy in pursuing a stake in Alliance Bank Malaysia Bhd. Initially aiming for a 49% acquisition, DBS withdrew its first application and now seeks approval to acquire up to 30% of the Malaysian lender.

The revision aligns with Bank Negara Malaysia regulations, which generally cap single-entity ownership in local financial institutions at 30%. By scaling back its request, DBS aims to improve the chances of regulatory approval while remaining within standard ownership limits.

If approved, the move would allow DBS to engage directly with Alliance Bank’s largest shareholder, Vertical Theme Sdn., which is partly backed by Singapore state investor Temasek Holdings. Temasek holds a 49% stake in Vertical Theme via Duxton Investment & Development Pte and approximately 28.3% of DBS itself, reflecting a complex network of strategic interests.

A successful deal would grant DBS a key operational footprint in Malaysia, where competitors such as Oversea-Chinese Banking Corp. (OCBC) and United Overseas Bank (UOB) are already established. This expansion represents a strategic effort by Southeast Asia’s largest bank by total assets to strengthen its regional presence.

Market reaction has been modest; Alliance Bank’s shares have declined 6% in Kuala Lumpur this year, compared with a less than 2% drop in the city’s main benchmark. The bank currently has a market capitalization of 7.7 billion ringgit (~$1.9 billion). DBS, Vertical Theme, and Malaysian regulators have not provided immediate comment on the revised bid.