Ping An Bank, the banking unit of Ping An Insurance Co of China will be merged into Shenzhen Development Bank Co, at 1.8 times its book value, the Oriental Morning Post reported on Wednesday, citing an unnamed banking source.

In return, Shenzhen Development bank will issue 1.64 billion shares to Ping An Insurance Co of China, which will own about 51 percent of the combined entity after the merger.

Zhang Zixin, General Manger of Ping An Insurance, refused to comment on the report but said the insurer was still in talks with the nation's watchdog for the merger deal, the Wall Street Journal reported Wednesday.

Ping An Bank Co and Shenzhen Development Bank, both based in the southern city of Shenzhen, have been working on an "unprecedented major restructuring" since June, an earlier China Daily report said.

Trading in shares of Ping An Insurance and Shenzhen Development Bank have been suspended from June 30.