BETTER than expected results from US banking giant Citigroup saw banks extend their rally yesterday and helped the FTSE 100 Index hold firm above 4000.

Barclays closed at a sixmonth high, thanks to another impressive gain on the back of Citi’s firstquarter figures, which revealed the smallest quarterly losses since 2007.

Lloyds Banking Group shares leapt by nearly a quarter at one stage, later closing 17 per cent ahead, while the wider FTSE added 39.82 points to 4092.8 News that General Electric also kept revenues steady despite falling profits helped buoy sentiment, although the Dow Jones Industrial Average on Wall Street struggled to hold on to early gains.

With corporate news thin on the ground on this side of the Atlantic, traders took their cue from Citi’s figures to pile back into bank shares.

Lloyds Banking Group surged 14.9p ahead to 104.6p, while Barclays and Royal Bank of Scotland also posted double-digit gains at one stage. Barclays finished the session up 15p to 227p, its highest since last October, while RBS added 4.1p to 32.7p.

Other financial stocks were in favour, with interdealer broker Icap jumping 25.25p to 409.25p and hedge fund Man Group gaining 22.5p to 274p.

Telecoms giant BT was the FTSE’s leading performer before the banks took over on market chatter that the Bank of England had bought up a chunk of BT’s corporate debt under its quantitative easing programme.

The boost for BT pushed its shares up nine per cent, or 7.9p to 91.6p, and came a month ahead of what are likely to be grim annual results for the firm.

GlaxoSmithKline extended gains when it unveiled plans to spin off its HIV treatment operation into a joint venture with Pfizer. The stock was 3p higher at 1038p.