NAB, AMP in race for Aviva's Australian unit: source

SYDNEY (Reuters) - National Australia Bank Ltd (NAB.AX) and AMP Ltd (AMP.AX) are among the parties to have submitted indicative bids for Australian unit of British insurer Aviva plc (AV.L), a source with direct knowledge of the matter told Reuters.

Aviva has appointed Morgan Stanley and JP Morgan to explore the sale, several sources told Reuters earlier this month, which is expected to fetch more than A$1 billion ($781 million).

NAB and AMP declined to comment.

"A handful of bids (are in).. short list will be decided in a few weeks," the source added. The source declined to be identified as the process is confidential.

A London-based spokeswoman for Aviva also declined to comment.

"Aviva's Australian business is focused on life insurance and wealth management and is ranked number nine in both these areas of the market," the spokeswoman said.

Two other sources, also with knowledge of the process, told Reuters that insurer AXA Asia Pacific Holdings Ltd (AXA.AX) and Westpac Banking Corp (WBC.AX) are unlikely to have submitted bids.

AXA Asia Pacific and Westpac declined comment.

A sale could help Aviva further alleviate worries about its capital position, which has been a cause of concern for some investors after the group left its 2008 dividend unchanged in March.

But Aviva last month bolstered its capital reserves by a quarter, addressing some of those worries.

($1=A$1.28)

(Reporting by Denny Thomas;)