The country's second biggest lender Commerce Asset-Holding Bhd and fifth largest AMMB Holdings will sign a pact this week to merge their banking and finance operations, industry sources said today.

Under a memorandum of understanding, AMMB will sell its retail banking operations to Commerce for RM4 billion in cash, a source close to the deal told financial news wire AFX-Asia.

"The two parties are thrashing out the details and if all goes well, AMMB and Commerce will sign the MOU before the week is out," the source said.