KUALA LUMPUR (Aug 22): The proposed merger between RHB Bank Bhd and AMMB Holdings Bhd has been called off after both parties have mutually agreed to end merger discussions, according to their filings with Bursa Malaysia.

The filings with Bursa said that "after much discussion and deliberation, RHB Bank and Ambank Group were not able to reach an agreement on mutually acceptable terms and conditions for the proposed merger."

However, the announcements do not reveal the detail on issues that have caused the merger talks to fail.

BFM Media had on Monday reported that the exclusive merger talks was on the verge of being called off  as the two banking groups had encountered issues, including the finding of a large contingent liability, in the due diligence process.

In the press release issued this evening, RHB Bank's group managing director Datuk Khairussaleh Ramli said, "We would like to record our sincere appreciation to the Board of Directors and Senior Management of AmBank Group for their cooperation throughout the discussions. With this decision, we will now continue to execute our initiatives under our current strategy to create value for our shareholders, and focus on delivering superior customer experience."

Meanwhile AmBank Group's CEO Datuk Sulaiman Mohd Tahir said in a separate statement, "We would like to take this opportunity to appreciate all those who were involved in the discussions from both sides for the past three months.

"Given the heritage and strength of the AmBank Group, we are confident of moving forward despite the fact that the merger did not materialise. Our Group's strategy and direction remains the same as we aspire to deliver on our Group Top 4 growth aspirations. We remain focused on our FY2018 (the financial year ending March 31, 2018) business plan in line with the Group's Top 4 strategy as we work towards running the bank better and changing the bank while delivering optimal returns for our shareholders," Sulaiman added.

With the cessation of the merger discussions, the exclusivity period pursuant to the exclusivity agreement entered into between both parties on June 1, 2017 will automatically lapse immediately.

The share trade of both RHB and AmBank were suspended today pending the announcement of this material announcement. RHB was last traded at RM4.88 and AmBank at RM4.70 on Monday.