Deutsche Bank was close to the top of the leaderboard, moving around 3.4 percent higher, after its Friday pre-open announcement that it had agreed to pay $7.2 billion to settle an investigation led by the U.S.'s Department of Justice into alleged mis-selling of mortgage securities (MBS).
This as Credit Suisse gave up gains to close 0.7 percent lower on Friday morning after revealing that it had reached a deal with U.S. authorities to settle claims for its role in mis-selling MBS. The Swiss lender was asked to drum up a total $5.7 billion. The Zurich-based bank said it would take a pre-tax charge of about $2 billion to pay for the settlement.
Meantime, U.K. bank Barclays closed 0.3 percent lower on news it is being sued by federal prosecutors for allegedly fraudulent MBS issued during the frothiest peaks of the U.S. housing bubble.
Following the Italian government revealing early Friday that it had approved the creation of a 20 billion-euro ($20.9 billion) rescue fund for troubled banks, the country's banking sector moved around 1.7 percent higher. This as shares, derivatives and ten-year bonds in the beleaguered lender Banca Monte dei Paschi di Siena (BMPS) were suspended on Friday. The bank is set to be the first recipient of the state fund after BMPS's hopes to raise private capital failed on Thursday evening.