Europe shares turn negative, led down by RBS

European shares surrendered gains and turned negative by early afternoon on Monday as banks extended losses, led by Royal Bank of Scotland, which reported the biggest-ever loss in UK corporate history.

At 1326 GMT, the FTSEurofirst 300 index of top European shares was down 1.5 percent at 791.78 points, having been as high as 817.56 earlier.

Banks took the most points off the index, with RBS itself tumbling 48.4 percent.

"It's the financials, led by Royal Bank of Scotland," said Giuseppe-Guido Amato, strategist at Lang & Schwarz in Germany, said.

RBS said it would report a loss of up to 28 billion pounds ($41.3 billion) for 2008, including a huge goodwill hit on its purchase of parts of ABN AMRO in 2007.

The DJ Stoxx banks index was the top sectoral loser, down 8.5 percent.

BNP Paribas, Deutsche Bank and Lloyds were down between 8.1 and 35 percent.

Barclays fell 7.1 percent, extending Friday's 25 percent losses despite confirming that its full-year profit would beat consensus.

Across Europe, Britain's FTSE 100 fell 0.8 percent, Germany's DAX lost 0.6 percent and France's CAC-40 dropped 0.5 percent.