National Australia Bank Ltd has declined to comment on reports that it had talked to advisers in London about the merits of a tilt at BankWest.
"We will look at things from time to time that come along, but they have to meet a very strict criteria," NAB chief executive for Australia Ahmed Fahour told reporters.
Mr Fahour said he wasn't sure where reports it had sought out advisers were coming from.
BankWest has been touted as a takeover target because BankWest's parent, HBOS, had been hit hard by negative sentiment towards global financial institutions.
NAB boss John Stewart said last month that NAB was running its ruler over St George Bank Ltd, which was the subject of a takeover offer from Westpac Banking Corporation Ltd.
St George and BankWest are attractive acquisition targets because government regulation prevents Australia's biggest four banks from merging.
Last month, federal treasurer Wayne Swan reinforced the four pillars policy after repeated independent rate hikes by the banks angered the electorate.
Mr Fahour said Australian banks needed to grow to compete internationally.
"Smaller banks in Australia, regional banks as well, are all vulnerable to takeover and will find it more difficult or more costly to raise funds," he said.
Mr Fahour acknowledged that the government wouldn't change the four pillars policy "just because a bank whinges about it".
"But we can't see the policy lasting forever," he said.
"I think the arguments for removing the policy can and must be won."
