Britain's FTSE falters ahead of holiday, banks in focus

* FTSE 100 down 0.3 pct

* Banks among biggest fallers

* Ex-divs also weigh

* AB Foods boosted by upgrade (ADVISORY- European stock markets are closed on Friday and Monday. There will be no European market reports on those days)

By Kit Rees

LONDON, April 13 (Reuters) - Britain's top share index declined on Thursday as financials, energy stocks and firms trading ex-dividend weighed, though volumes were light ahead of a market holiday.

The blue-chip FTSE 100 index was down 0.3 percent at 7,327.59 points at its close, in line with a broader decline on European markets.

"We're seeing a bit of risk-off ahead of the bank holiday weekend," said John Moore, a trader at Berkeley Capital.

The FTSE 100 also posted a slight loss for the week.

Financials were the biggest drag on the FTSE 100, taking off nearly 10 points. HSBC, Standard Chartered (BSE: 580001.BO - news) and Royal Bank of Scotland (LSE: RBS.L - news) all fell by 1.3 percent to 1.7 percent, with broadly well-received earnings releases from their U.S. peers failing to boost sentiment.

"The only thing I can attribute it to is a bit of pessimism coming back into the industry that all is not ok at the top of these banks, and there's still a bit of rot there," Jonathan Roy, advisory investment manager at Charles Hanover Investments, said, referring to the news earlier this week that British regulators are investigating Barclays (LSE: BARC.L - news) ' CEO over a whistleblowing incident.

"Couple that with a market that is already high, and there's very few catalysts to take these stocks higher."

Energy stocks also dragged, taking off around 9.7 points. Royal Dutch Shell (LSE: 0LN9.L - news) fell 1.2 percent, and BP was down 0.3 percent as the price of oil edged lower.

Stocks trading without rights to their latest dividend payout dragged, including Standard Life (LSE: SL.L - news) , which dropped 2.4 percent and was the biggest individual faller.

Primark-owner Associated British Foods (LSE: ABF.L - news) jumped 3.6 percent to its highest level since the beginning of January after Jefferies raised its rating on the stock to a "buy", citing continued strength in sugar and a turn in Primark margins .

"The 19 April interims should confirm strong results ... thanks to fx translation boost and a sugar rebound. We also expect a more assured message on the Primark margin outlook," analysts at Jefferies said in a note.

Precious metals miners were also in demand, with Fresnillo (Amsterdam: FN6.AS - news) and Randgold Resources both gaining 1.5 percent.

The underlying price of gold hit a five-month peak as investors sought safe-haven assets amid rising geopolitical tensions over U.S. relations with Russia and North Korea. A weaker U.S. dollar also helped. (Reporting by Kit Rees, editing by Gareth Jones)