Banks lead European shares higher; oils slip

* FTSEurofirst 300 index gains 0.2 pct

* Banking shares rise; RBS up

* Miners gain, oils fall

By Joanne Frearson

LONDON, Nov 6 (Reuters) - European shares closed higher on Friday for the third consecutive session after investors decided U.S. monthly payroll data was not as bad as first feared, with banking stocks the major gainers.

The FTSEurofirst 300 .FTEU3 index of top European shares closed up 0.2 percent at 992.53 points in a choppy session, having earlier been up as much as 995.78 points and down as low as 979.69 points.

The benchmark index has gained 1.7 percent for the week and is up around 54 percent since reaching a lifetime low in March.

The index fell earlier after U.S. employers cut a deeper-than-expected 190,000 jobs in October, driving the unemployment rate to 10.2 percent, the highest in 26-1/2 years. [ID:nN06178752]

However, some of the sting was taken out of the report, after job losses for August and September were revised to show 91,000 fewer jobs were lost than previously reported, hinting at some improvement in labour market conditions.

"After some initial confusion about the jobless numbers, the market returned to an upward track with August and September payroll numbers being revised up," said Howard Wheeldon, strategist at BGC Partners.

Banks added the most points to the index. Part-nationalised Royal Bank of Scotland (RBS.L) gained 5.3 percent, after it said it more than halved third-quarter losses as impairments fell. [ID:nL6671701]

HSBC (HSBA.L), BNP Paribas (BNPP.PA), Credit Suisse (CSGN.VX) and Barclays (BARC.L) were up 1.3 to 3.3 percent.

MINERS IN DEMAND

Miners featured among the biggest gainers rebounding from earlier falls.