UPDATE 2-Australia's CBA denies report of BankWest bid

(Adds analyst comments)

By Mette Fraende

SYDNEY, Oct 2 (Reuters) - Commonwealth Bank of Australia (CBA.AX) denied a media report on Thursday that it had offered to buy the BankWest business of British bank HBOS HBOS.L, though analysts believed the banks could be in talks.

The Australian Financial Review business daily reported that Australia's second-largest lender had offered as much as A$3 billion ($2.4 billion) for BankWest.

"Commonwealth Bank is aware of recent media speculation regarding the possible acquisition of BankWest. Commonwealth Bank regularly reviews acquisition opportunities but at this time confirms we do not have any offer with HBOS Plc to acquire BankWest," it said in a statement.

Analysts said however they believed CBA was keen to acquire in the current environment.

"I think they are definitely doing the works. I have no doubt they are looking at it. The question is how desperate HBOS is," said a banking analyst who asked not to be identified due to company policy.

"They (Commonwealth) have got the firepower to do something, and senior management is aware they've got the firepower to do something," the analyst said.

Without citing sources, the newspaper said the offer was below the level that HBOS, the subject of a UK government-backed takeover offer from fellow British bank Lloyds TSB LLOYD.L, was willing to sell for.