* FTSE 100 up 0.1 pct at 6,739.23 points
By Francesco Canepa
LONDON, Nov 1 (Reuters) - A 7 percent dive for Royal Bank of Scotland held back Britain's main share index on Friday, poor results for the state-controlled lender overshadowing its moves to deal with a $61 billion portfolio of bad debts.
Joining the country's fifth biggest bank by capitalisation among top fallers was aircraft parts supplier Meggitt, down 10 percent and on course for its worst daily loss in 12 years after it cut its full-year revenue guidance.
The two firms results added to a largely negative tone from corporate reports this week and drove heavy selling of both stocks, with volume more than twice their respective full-day averages for the past three months, compared with less than 40 percent for the FTSE 100.
As the earnings season passes the half-way mark, 53 percent of companies so far in the STOXX Europe 600 index have missed consensus expectations, compared with less than half in recent quarters, running somewhat contrary to the growing optimism about Britain's macroeconomic numbers.
Analysts have cut their estimates for next year's earnings from British companies by 1.1 percent in the past 30 days, and now the mean estimate from the analysts with the best track record is for a 10.8 percent growth rate.
"We're still waiting for this point when we can proclaim 'yes earnings growth is picking up significantly'," Lars Kreckel, global equity strategist at Legal & General Investment Management, said.
"We've done a lot of pricing out of risk and...my base case is that equities have roughly an upside equivalent to the earnings growth that we can expect (next year)."
The FTSE 100 was up 7.8 points, or 0.1 percent, at 1154 GMT at 6,739.23 points, having come off an intra-day low of 6,715.30 points as U.S. futures pointed to a higher start on Wall Street. The index is still up 12.5 percent from its June closing low.
PLANS AS EXPECTED
RBS' plan to create an internal "bad bank" was seen as likely to lead to an acceleration in the number of impaired loans in the fourth quarter. The plan of itself, which analysts said was largely as expected and a relief for traders who had feared an outright spinoff, could not offset results that were much worse than forecast.
"Traders hoping for a treat were spooked by the Halloween numbers delivered by RBS this morning," Marc Kimsey, senior trader at Accendo Markets, said. "The bank is a long way behind peers Lloyds and Barclays (LSE: BARC.L - news) , and remains the ghoul of the sector."
Societe Generale (Paris: FR0000130809 - news) 's derivative strategists said a rally in the FTSE was now likely to pause and recommended that investors sell options to buy the index at 7,000 points by December.
Providing some support was telecoms firm Vodafone, which added 10 points to the index after Bloomberg reported late on Thursday that AT&T (NYSE: T - news) was exploring a potential takeover of the company, Europe's largest mobile carrier.
BofA Merrill Lynch, which sees the UK mobile company as a good cultural fit with AT&T, said it expects Vodafone's shares, currently at 230.42 pence, to rise 27 pence and that a potential bid from AT&T could offer further upside. (Reporting By Francesco Canepa; editing by Patrick Graham)