The three-way merger between First Commercial Bank (第一商銀), Dah An Commercial Bank (大安商銀) and Pan Asia Bank (泛亞銀行) announced earlier this year is seen changing into a two-way merger, as Dah An is holding back on its original intention to go ahead with the merger, sources close to the deal said yesterday.
The merger, announced on Feb. 13, was the second government-organized bank merger that was announced after the statutes governing mergers of financial institutions were passed by legislature in November.
Executives at First Commercial -- which is pegged to be the surviving bank -- and Pan Asia said that Dah An still hasn't signed a contract with the accounting consultancy firm that was appointed to assist the banks with the merger.
"We are supposed to provide financial credentials including various assets for the firm to evaluate and set a standard for conversion of shares. Failure by Dah An to submit papers has caused a two-month delay in the merger's progress," First Bank's spokesman said.
The banks originally aimed to finish asset evaluation by mid-August, so that the respective boards and shareholders could review the merger details around end August.
"But it looks like this won't happen in August. We may even have difficulty finishing the details in the third quarter," he said.
However, First Commercial and Pan Asia still remain hopeful of a two-way merger even if Dah An eventually drops out.
"We are still pushing ahead with preparations. Dah An's likely departure should not change First Bank's merger plan, since its ultimate purpose is to establish a financial holding company, and this won't hurt the interests of the other two banks," the executive at Pan Asia said.
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