UPDATE 1-Australia's BOQ eyes CIT Group business

SYDNEY, March 29 (Reuters) - Australia's Bank of Queensland is looking to buy CIT Group's Australia and New Zealand's vendor finance business in another sign of Australian banks trying to pick up assets of struggling foreign lenders .

'Due diligence is significantly progressed but incomplete and there is no guarantee a transaction will occur,' the Australian lender said in a statement.

No details on the likely deal value or the size of CIT's Australian and New Zealand business was disclosed.

The Australian Financial Review reported in its Street Talk column that CIT Australia's lending book was worth about A$500 million ($452.1 million) and the net assets were worth about A$200 million.

Australian banks weathered the global financial crisis much better than their U.S. and European peers and now boast excess capital, which they are selectively using to largely strengthen their presence in a growing economy.

No.2 lender Commonwealth Bank of Australia bought HBOS' BankWest for $1.5 billion in late 2008 and No.4 Australia and New Zealand Banking Group bought the 51 percent stake it did not own in a wealth joint venture with ING for $1.6 billion last year,

CIT Group emerged from bankruptcy in December and earlier this month reported a $1 billion loss in the fourth quarter, excluding one-time items and accounting adjustments, as the lender was hurt by high borrowing and credit costs.

CIT, which is trying to re-establish itself after a disastrous foray into subprime lending, and one of the largest bankruptcies in U.S. history, recently named former Merrill Lynch honcho John Thain as CEO.

Bank of Queensland shares were a touch higher, or up 0.25 percent, at A$11.80.

(Reporting by Narayanan Somasundaram; Editing by Ed Davies)

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