The Herald Sun reported that HBOS "is believed to be reviewing the future of its BankWest subsidiary" in Australia.
The newspaper tied the possible sale of BankWest to awkward strategic options facing HBOS in Britain, where last year's credit crunch has well and truly hit the property market, and dragged down the profitability of the mortgage business of all banks with it.
HBOS, along with RBS, and Bradford and Bingley, is undertaking rights issues at the moment to shore up its capital position.
The share prices of all British banks have been weakening, with the trend exacerbated overnight.
B&B late yesterday confirmed weekend speculation that it would cut the price set for its own rights issue and sell a 23 per cent stake to private equity group TPG.
The Herald Sun reported that BankWest "has begun to pull out of lease deals on properties which had been earmarked for new branches in Victoria and New South Wales."