* Analysts see Hastings worth between A$250 mln and A$600 mln
* Westpac quit a previous sale process citing market conditions
* Mooted deal part of a selldown of assets by Aussie banks (Adds analyst quote and background on deals of other Australian banks; updates possible price range)
By Tom Westbrook
SYDNEY, July 24 (Reuters) - Westpac Banking Corp WBC.AX said on Monday it is in exclusive talks with Charter Hall Group CHC.AX for the sale of its Hastings Funds Management unit, in the latest move by a big Australian bank to offload a capital intensive division.
It is the second time Westpac has put Hastings up for sale in as many years and three analysts contacted by Reuters put the potential price between A$250 million ($200 million) and A$600 million.
Westpac, Charter Hall and Hastings declined to comment on the potential sale price.
The mooted deal follows stiffer bank capital rules in the country, designed to protect them from financial shocks. This has spurred big banks to sell capital-intensive assets such as insurance and fund management businesses. Fund Management specialises in buying and managing infrastructure, property, alternative debt and private equity and in recent years bought a power grid and the land title registry in New South Wales state. you see the capital requirement going up and you need more capital, you can either raise capital or you can sell stuff that doesn't quite strategically fit, and it's the latter," CLSA banking analyst Brian Johnson said of the deal.
Westpac tried to sell the unit last year but withdrew from sale talks, citing adverse market conditions.
National Australia Bank NAB.AX , among Australia's 'Big Four' lenders, last year spun off its struggling U.K. operations, withdrew from underperforming businesses in the United States and sold 80 percent of its life insurance business to Japan's Nippon Life NPNLI.UL for A$2.4 billion.
And Australia and New Zealand Banking Group ANZ.AX agreed to sell its wealth and retail businesses in five Asian markets to Singapore's biggest lender, DBS Group Holdings Ltd DBSM.SI , for around S$110 million in 2016. ($1 = 1.2633 Australian dollars)