Mott says bank shares already reflect writedowns

By Laurence Fletcher

LONDON (Reuters) - Asset writedowns in the UK banking sector are now largely accounted for in share prices, and banks can now be viewed just like other cyclical sectors, says PSigma star fund manager Bill Mott.

Mott, who ran the 613 million pound Credit Suisse Income fund until 2003 and now manages PSigma Asset Management's 321 million pound Income fund, said factors such as the outlook for the overall UK economy were now more important to how bank stocks perform.

His comments come after Royal Bank of Scotland (RBS.L) this week announced 5.9 billion pounds of new writedowns and said it would tap shareholders for 12 billion pounds to rebuild its balance sheet.

On Thursday Barclays (BARC.L) said first-quarter profit fell from a year ago but did not comment on whether it has taken or will make any more writedowns.

"We've moved on from asset writedowns, particularly with the swap facility the Bank of England has facilitated," Mott said in a recent interview.

"It's difficult to believe there's much more out there in (banks') newsflow not already discounted in share prices ... It would be extraordinary beyond belief if they (RBS.L) were to come back with further bad news. I'm sure the supporters and underwriters (of the rights issue) made it a criterion."

RBS has underperformed the FTSE 100 .FTSE by 45 percent over the past year, while Barclays has underperformed by 32 percent.

"The uniqueness that banks had in the last several months is beginning to unwind. I don't think you need a particularly different view of banks compared with other areas of the market," he said.