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* FTSE 100 ends down 0.3 pct at 6,710.28 points
* Hefty Deutsche Bank demand hits banks
* FTSE 100 still up around 8 pct so far in 2016
By Alistair Smout
LONDON, Sept 16 (Reuters) - Britain's top share index fellon Friday to record a second straight week of losses asheavyweight bank stocks dropped after U.S. regulators demanded$14 billion from Deutsche Bank to settle claims over missellingmortgage-backed bonds.
The blue-chip FTSE 100 index closed down 0.3 percentat 6,710.28 points, posting a loss of around 1 percent over theweek.
Royal Bank of Scotland fell 4.4 percent whileBarclays declined by 2.8 percent, with the Europeanbank sector as a whole hit by an 8.5 percent slump at DeutscheBank.
Deutsche Bank dropped after getting the $14 billion demandfrom the U.S. Department of Justice to settle claims that itmissold mortgage-backed securities. The figure was well abovewhat Deutsche had expected and the bank said it would fight fora reduction.
"Investors in the sector have been spooked by this fine. Itremains to be seen exactly how much Deutsche Bank pays, but it'sa reminder of all the regulatory issues that the banks stillface," IG market analyst Chris Beauchamp said.
"There are concerns that there could be more fines furtheralong the road."
Some healthcare stocks managed to rise and outperform theweaker overall market.
AstraZeneca rose 2 percent after the company saidcombining its Forxiga type-2 diabetes drug with older medicineBydureon was more effective at controlling blood sugar levelsthan treatment with either drug on its own.
Spire Healthcare, a FTSE 250 mid-cap stock, alsosurged 8 percent following a media report of bid interest fromMediclinic. Mediclinic fell 2.4 percent.
The FTSE 100 is still up around 8 percent since the start of2016, as record low interest rates from the Bank of England havehit returns on bonds and cash and driven investors to seekbetter returns available from the stock market. (Additional reporting by Adela Suliman and Sudip Kar-Gupta;Editing by Louise Ireland/Keith Weir)