DBS Group, Singapore’s largest bank, is exploring acquisitions in Malaysia as part of its regional expansion strategy, according to sources.

Reuters has learned that potential targets include a 29.1% stake in Alliance Bank Malaysia held by Singapore state investor Temasek, valued at approximately US$460 million.

In addition, DBS is reportedly considering the purchase of retail banking assets from Kuwait Finance House in Malaysia, estimated to be worth over US$500 million.

Both acquisitions would require approval from Malaysia’s central bank, Bank Negara Malaysia.

These discussions are still in preliminary stages, and no agreements have been reached, the sources cautioned.

Kuwait Finance House has confirmed that the sale of its Malaysian retail assets is in preliminary stages but declined to provide further details.

Meanwhile, DBS and Temasek both declined to comment.

Malaysia’s improving economic outlook, bolstered by new infrastructure projects and rising investments, has made it an attractive market for financial institutions.

Rival Singaporean banks OCBC and UOB already operate retail banking businesses in the country, leaving DBS as the only major player without a presence.

This move would mark DBS’ renewed interest in Malaysia after a failed attempt to acquire a stake in Alliance Bank in 2012 due to regulatory barriers.

However, the current government under Prime Minister Anwar Ibrahim is reportedly more receptive to foreign investments.

Under outgoing CEO Piyush Gupta, DBS has entered major markets such as China, India, Indonesia, and Taiwan through targeted acquisitions.

The bank’s purchase of Citigroup’s consumer banking operations in Taiwan last August highlights this expansion strategy.

Gupta has also emphasized pursuing ‘bolt-on’ acquisitions to support the bank’s growth across Asia, with its potential entry into Malaysia aligning with this vision.

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