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Royal Bank of Scotland (RBS) and Barclays both made strong gains, though the FTSE lost a 40-point improvement by mid-morning trading, reports the Associated Press.
Optimistic comments by Sir Philip Hampton, the chairman of RBS, also gave fresh impetus to stock market traders after he told the Financial Times that he detected positive signs in recent investment activity.
Despite the good news, however, fashion retailer French Connection saw its shares fall 3.25p to 53p after announcing annual losses of more than £17 million.
Shares in SIG, the insulation group, also dropped by ten per cent to 94.25p, after it announced plans to issue new shares.
In related news, the IMF has warned that the UK faces a worse recession than both the US and the rest of Europe.
