Commonwealth Bank eyeing BankWest

Commonwealth Bank of Australia, the country's No. 2 bank by assets, may offer over €3.5 billion (£2.8 billion) to HBOS for its Australian unit BankWest, the Australian newspaper reported yesterday.

CBA declined to comment on the report.

HBOS, Britain's biggest mortgage-lender, has appointed Morgan Stanley to advise on future options for the west Australian-based lender, which is worth €2.9 billion to €4 billion, the newspaper said, citing banking sources.

But a CBA source told Reuters no formal process was underway. "If we were doing any deal like that then we would have appointed outside advisers," a CBA source said.

Morgan Stanley also declined comment.

The plan comes after CBA last week withdrew from acquisition discussions with Royal Bank of Scotland to acquire ABN AMRO Australia, the paper said.

CBA chief executive officer Ralph Norris said in a television interview on Sunday that his bank would continue to look for acquisition opportunities.

"You always look at acquisitions and it's about how compelling the acquisition opportunity is. Certainly, we would look at all opportunities. We have done that in the past, and we will continue to do so in the future," Mr Norris said.

Any Commonwealth bid would face few competition or regulatory hurdles, the newspaper report said.

The Commonwealth Bank of Australia is a provider of integrated financial services, including retail, business and institutional banking, superannuation, life insurance, general insurance, funds management, broking services and finance company activities. The principal activities of the Company include banking, funds management and insurance. The Bank provides a range of retail banking services, including housing loans, credit cards, personal loans, savings and cheque accounts, and demand and term deposits. The Company's funds management business is managed as part of the Wealth Management division. This business manages a range of wholesale and retail investment, superannuation and retirement funds. Investments are across all asset classes, including Australian and International shares, property, fixed interest and cash.

The Bank provides term life insurance, investment contracts, annuities, master trusts, investment products and household general insurance. Last month, HBOS flagged asset sales after its first-half profits halved due to a £1.1 billion hit on debt securities. That stoked speculation it would offload BankWest.

But it is unlikely to find much interest among the other top Australian banks.

National Australia Bank Ltd, Australia's top lender, and Australia and New Zealand Banking Group Ltd are seen unlikely buyers as they grapple with higher loan losses due to global credit crisis.

Westpac Banking Corp, the fourth-biggest lender, is in the process of completing its planned €10 billion acquisition of St George Bank Ltd.