Spain’s decision to delay a possible merger of BBVA SA with Banco Sabadell SA is leaving analysts divided over whether the deal will still go ahead.

Spain's BBVA is considering whether to go ahead with its bid for Sabadell after conditions imposed by the Spanish government on the deal and will reassess the impact on its estimated cost savings, the bank's country manager for Spain said on Wednesday.

Spain's government has approved BBVA's takeover of Sabadell under conditions requiring the banks to remain separate for three years and maintain employment levels, potentially complicating BBVA's strategy.