STOCKS NEWS EUROPE-RBS falls on writedowns, bad debts gloom

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09:23GMT 04Nov2008-RBS falls on writedowns, bad debts gloom

----------------------------------------------------------- Royal Bank of Scotland (RBS) (RBS.L) shares tumble 8 percent as a grim outlook outweighs a smaller-than-expected third-quarter writedown, with analysts citing the prospect of big writedowns in Q4, other losses in its investment bank arm and a sharp rise in non-performing loans as cause for concern.

RBS reports a third-quarter writedown of 206 million pounds on toxic assets, limited by a 1.2 billion pound positive impact from accounting changes. Exposure to counterparty and sovereign risk hit income by 1 billion pounds in October, and non-performing loans rose to 1.72 percent at the end of September from 1.47 percent at end-June. [nL4398710]

"The outlook statement is very cautious, the IMS flags higher impairments as expected and the prospect of further significant writedowns in Q4 remains, but it could have been worse," says Simon Willis, analyst at NCB.

Reuters Messaging rm://steve.slater.reuters.com@reuters.net

09:19GMT 04Nov2008-REpower up; Suzlon, Martifer in negotiations

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