DBS Group’s push to expand into Malaysia has hit a snag, with Bloomberg reporting that its proposed purchase of a stake in Alliance Bank is on hold while it awaits clearance from the central bank.

People familiar with the matter said DBS and Alliance’s biggest shareholder, Vertical Theme, filed applications with Bank Negara Malaysia about eight months ago but have yet to hear back.

Approval is required before discussions on a sale can take place.

Vertical Theme, backed by Temasek Holdings, owns about 29 percent of Alliance.

DBS had considered raising that stake to nearly 49 percent through a partial offer, though foreign ownership of Malaysian banks is capped at 30 percent, a limit authorities have discussed easing.

DBS and Vertical Theme declined to comment, while Alliance Bank said it was unaware of any deal in progress.

A transaction would give DBS its first retail foothold in Malaysia, where rivals OCBC and UOB already operate.

Alliance Bank, valued at about US$1.8 billion, has shed 4.8 percent in market value this year.

Featured image: Edited by Fintech News Singapore, based on image by Alliance Bank