BANKS enjoyed mixed fortunes on the FTSE 100 Index today, with disappointing results for HSBC and a ratings downgrade for Royal Bank of Scotland but a hopes of a return to dividend pay-outs at part-nationalised Lloyds.

HSBC was the biggest faller and Royal Bank of Scotland not far behind as they weighed on the top-flight, which slipped 28.3 points to 6619.6.

The FTSE fall came in the wake of weak performance overnight from Asian markets, as they were held down by disappointing US jobs data last week.

Meanwhile in New York today, the Dow Jones Industrial Average was also lower in early trading while stock markets in France and Germany off a little too.

The pound was up one cent against the US dollar at 1.53 US dollars while it also rose one cent against the euro at 1.16 euros.

It came as figures showed the UK's dominant services sector had returned to boom-time levels of activity, with a 60.2 reading for July well above the 50 level that separates growth from contraction according to the Markit/CIPS services purchasing managers index.

The result completed a hat-trick of robust data from the three main sectors of the economy, adding to growth in both the manufacturing and construction sectors.

But HSBC weighed on the FTSE 100 after first-half results missed City forecasts.

Shares were 4%, or 33p, lower to 721.7p despite the banking giant posting profits 10% up on a year earlier to 14.1 billion US dollars (£9.2 billion) on lower bad debts and shrinking costs.

Revenues fell 7% to 34.4 billion US dollars (£22.4 billion) amid shrinking income in North America and Latin America, and HSBC said it has set aside another £239 million to compensate customers mis-sold payment protection insurance.

Meanwhile Royal Bank of Scotland, which has just appointed new chief executive Ross McEwan to replace Stephen Hester, saw shares fall after a downgrade.

UBS said it was underwhelmed by last week's results from the 80% state-backed bank despite them seeing it return to half year profit. Shares were down 5.1p to 317.4p.

But hopes of a return to big dividend payouts saw a better FTSE 100 performance for the other state-backed bank, Lloyds.

It rose after reports that chief executive Antonio Horta-Osorio had told investors it aimed to pay out 70% of profits as a dividend within three years.

The part-nationalised bank last week said it was ready for the Government to pull the trigger on the sale of its 39% stake after swinging out of the red with half-year profits of more than £2 billion. More optimism over dividends helped Lloyds continue its strong run of form by climbing 2p to 75.7p.

The biggest risers on the FTSE 100 were Aggreko up 55p to 1642p, Vedanta Resources up 39p to 1240p, International Airlines Group climbing 9.7p to 326.7p and Lloyds Banking Group up 2p to 75.7p.

The biggest fallers on the FTSE 100 were HSBC down 33p to 721.7p, Admiral off 34p at 1330p, Royal Bank of Scotland down 5.1p to 317.4p and Shire down 37p to 2405p.