Local banking sources expect Lloyds to push back any sale program of BankWest but believe the Perth-based bank will eventually be jettisoned, The Australian reports.
Just hours after announcing the $27 billion takeover on Thursday, Eric Daniels, the chief of Lloyds TSB, said: "We will clearly look at disposals of non-core assets.
"We will review our catalogue of brands and hopefully arrive at something that is very sensible."
The Wall Street Journal's MarketWatch also quoted Lloyds finance boss Tim Tookey as saying the bank would "actively consider the potential disposal of any non-core assets identified during the integration".
Increasing that urgency for Lloyds' management is their aim to boost the enlarged bank's tier one capital ratio to above 6 per cent. It is now at 5.9 per cent.
British banking analysts have previously earmarked BankWest as a non-core asset for HBOS operations that could be sold.
Mr Daniels told analysts it was too early to identify which assets the bank would sell.
In the past few weeks, speculation had surfaced that the Commonwealth Bank and National Australia Bank had made an approach to HBOS about buying BankWest, which is estimated to be worth more than $6 billion.
Until the global financial turmoil hit this week, NAB had been considered a front-runner, potentially selling its British banking operations -- Clydesdale and Yorkshire banks -- to HBOS as part of an asset swap arrangement.
"St James's Place and BankWest in Australia are the natural outliers," said Sandy Chen, a Panmure Gordon & Co analyst in London. Lloyds have already reviewed their business for possible disposals and it is still very early days.
"They will take their time."
HBOS acquired BankWest's minority shareholders in 2003 for about $1 billion. It now holds about 3.5 per cent market share of the national housing sector and has a customer base of more than 860,000.
HBOS Australia chief David Willis said on Thursday that "Australia's banking customers will be part of one of the biggest banks in the world" and that Lloyds' AAA credit rating would "enhance the position of HBOS Australia, including BankWest".
It is unclear if NAB and CBA still have an appetite to acquire BankWest.
"If there is an attractive offer for BankWest in Australia I think they'd jump at it," said Alan Beaney, investment head at Sevenoaks, England-based Principal Asset Management, which holds HBOS and Lloyds stock.
Read more on this story in The Australian.
HBOS Australia says business as usual
Property Owners Embrace Automation
