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UK banks lift European shares index

Tuesday, February 12 16:43:52

UK banks led European shares higher today after Britain's third biggest lender, Barclays , unveiled swingeing cost cuts and a strategic overhaul that fuelled expectations its peer group would follow suit.

Shares in Barclays rose 8.6 percent to a two year-high as the bank's new management said it would cut jubs and prune its investment bank to save 1.7 billion pounds ($2.66 billion) in annual costs.

UK peers Royal Bank of Scotland and Lloyds Banking Group gained 4 percent and 4.9 percent, respectively, on speculation they may follow in Barclays' footsteps.

They were among top gainers on the pan-European FTSEurofirst 300 index, which provisionally closed 0.5 percent higher at 1,160.43 points.

"On the back of Barclay's report we've seen a lot of playing both Lloyds and RBS," Will Hedden, a senior trader at IG, said.

"With the focus on the investment banking changes, there are a few people who are expecting RBS to be quite aggressive with its investment bank and push through job cuts." (C ) Reuters