RBS sees global monoline-related markdowns of $80 bln

April 7 (Reuters) - Royal Bank of Scotland said the deterioration in monoline credit quality stepped up in the first quarter and added that it expects global monoline-related markdowns of about $80 billion, including over $50 billion from European banks.

It seems not all banks have marked down conservatively enough, notably Barclays Plc (BARC.L) and Deutsche Bank (DBKGn.DE), which, taken with their tight capital positions, remain key "sells," the brokerage said.

Barclays with $11.8 billion in monoline assets and Deutsche Bank with $9.2 billion remain most exposed, followed by Societe Generale (SOGN.PA) with $4.8 billion, UBS AG (UBSN.VX) with $3.9 billion and Credit Agricole (CAGR.PA) with $3.6 billion, the brokerage said.

"The timing of recognition is difficult to predict, but as more monolines get downgraded to 'junk' -- as was the case with MBIA Inc (MBI.N) and Radian Group Inc (RDN.N) -- we believe it will be more difficult to get away with low provisioning rates," the brokerage said.

It added that Credit Suisse (CSGN.VX), which has no monoline exposure, remained its top pick in the sector.

The principal driver behind Barclays, Deutsche Bank and UBS markdowns remains monoline credit quality deterioration, implying that changes in mark-to-market rules should be much less of a support, the brokerage said.

On the other hand, French banks' markdown estimates are driven much more by potential asset price declines, leaving more room for manoeuvre, assuming a change in accounting rules, it added. (Reporting by Supantha Mukherjee in Bangalore; Editing by Himani Sarkar)