Commonwealth Bank of Australia has offered to acquire West Bank, the Australian subsidiary of troubled UK bank HSBO, for about $1.44 billion, reports quoting industry sources said.

Commonwealth Bank said it has started exclusive talks with HBOS Plc to buy its local unit as the British bank is facing financial turmoil at home.

''Commonwealth Bank of Australia is in exclusive talks to buy Bank West, the Australian subsidiary of the UKs beleaguered HBOS, in a deal valuing the unit at about A$2 billion ($1.44 billion).

Commonwealth Bank, however, said discussions were continuing and the parties have not reached agreement.

Australia's four largest banks - Commonwealth Bank of Australia, ANZ, National Australia Bank and Westpac - are lapping up their lesser rivals as the banking sector in Australia undergoes a major shake-up.

Bank of Australia and ANZ, meanwhile, are reported to be looking at acquiring the No 6 Australian bank that is owned by diversified Australian financial services group Suncorp-Metway, the Financial Times said in a report.

HBOS itself is in the process of being acquired by UK banking major Lloyds TSB for around £12.2 billion.

A sale of west bank could provide much-needed capital for HBOS, which is being taken over by Lloyds TSB Group Plc.

HBOS expects to retain its two most profitable businesses in Australia - BOS International and Capital Finance - Dow Jones Newswires reported, citing a source familiar with the developments.

HBOS Australia reported a 15 per cent increase in its pretax profit for 2007, at A$757 million, but pretax profit in the six months to 30 June was down 12 per cent to A$325 million.