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UPDATE 1-European shares turn lower, led by RBS on 'bad bank' plan

Friday, 1 Nov 2013 | 4:29 AM ET

LONDON, Nov 1 (Reuters) - European shares gave up early gains to turn lower on Friday, led by Royal Bank of Scotland after it said it would create an internal "bad bank" to manage the run-down of its riskiest assets.

The stock fell 3.8 percent to lead fallers in both the FTSE 100 and pan-European FTSEurofirst 300 in heavy volume at 38 percent of its 90-day daily average after 20 minutes of trade.

"A clear vision is emerging at RBS - but the implementation of that vision will take some considerable time," Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers said in a trading note to clients.

"With the perception prevailing that there are lesser problems and better opportunities elsewhere within the sector, the current market consensus of the shares as a sell is likely to remain in place."

The broader index gave up early gains to turn lower soon after the open and by 0822 GMT was trading down 0.2 percent at 1,289.68 points, just off its 5-year high.

Leading gainers across the index was heavyweight UK telecom Vodafone, up 2 percent after a report by Bloomberg that U.S. peer AT&T was eyeing up a potential takeover bid.