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Earnings lift European shares, banks shine

FILE PHOTO: A trader sits in front of the computer screens at his desk at the Frankfurt stock exchange, Germany, June 29, 2015. REUTERS/Ralph Orlowski/File Photo

By Helen Reid and Julien Ponthus

LONDON (Reuters) - Earnings, particularly in the banking sector, lifted European shares on Friday at the end of a volatile week, as investors drew encouragement from Apple becoming the world's first trillion-dollar company.

The pan-European STOXX 600 index closed up 0.7 percent but ended the week on a 0.5 percent loss.

Financials climbed as shares in RBS rose 3 percent after the recovering state-owned bank announced its first dividend in a decade.

France's Credit Agricole posted the best performance of Paris's CAC 40 index with a 2.3 percent rise with second-quarter profits ahead of estimates.

Peer Natixis also gained 1.4 percent as profits rose between April and June.

Overall, the banking sector's profitability is up 22 percent year-on-year and credit quality is improving, Goldman Sachs analysts said, calling the quarter a healthy one for banks.

Also reporting on Friday, German insurer Allianz rose 1 percent after it reaffirmed it is on track to meet its 2018 profit target.

"The group's key business continues to demonstrate robust operating performance and solvency remains comfortably above the upper end of the group's target range," said Goldman Sachs analysts.

Overall, European corporates have delivered 7.8 percent year-on-year earnings growth for the second quarter so far, up on first quarter gains, according to Thomson Reuters data.

Apple was a driver for the broader tech sector in Europe, which climbed 0.6 percent with chipmakers - some of which supply the iPhone maker - the top gainers.

Siltronic, Ams and BE Semiconductor rose 2.2 to 4.8 percent.

Autos rose 0.8 percent in a relief bounce after two days of selling following a threat by U.S. President Donald Trump to hike tariffs on Chinese imports.

Airport retailer Dufry fell 5.9 percent to a four-month low after reporting lower-than-expected sales growth.

Heineken shares added 2.3 percent after the firm sealed a $3.1 billion tie-up with the owner of China’s largest brewer, China Resources Beer, under which Heineken will take a 40 percent stake in the Chinese company.

(Reporting by Helen Reid; Editing by Kit Rees, John Stonestreet and Peter Graff)