* FTSE down 0.2 percent

* Banks knocked as Moody’s slashes Ireland’s credit rating

* AstraZeneca slides after drug setback

LONDON, Dec 17 (Reuters) - Banks pulled Britain’s top shares lower around midday on Friday, as concerns over Ireland’s debt situation weighed on the sector after Moody’s slashed the country’s credit rating.

By 1139 GMT, the FTSE 100 .FTSE was down 10.63 points, or 0.2 percent, at 5,870.49.

Banks .FTNMX8350 were led lower by Royal Bank of Scotland RBS.L, down 2.2 percent, on persistent concerns over euro zone debt, as Moody's Investors Service cut Ireland's credit rating by five notches to Baa1 from Aa2 and said further downgrades could follow.

“Europe’s sovereign debt problems are hampering the FTSE’s progress,” said Jimmy Yates, head of equities and CMC Markets.

“Until a firm resolution is agreed by EU leaders, London’s blue chips will struggle to break above recent highs (5,907.10) before the year-end.”

Elsewhere among the fallers, AstraZeneca AZN.L slipped 5.3 percent after its new heart medicine Brilinta failed to win approval from U.S. regulators. [ID:nLDE6BG06F]

UK REITS RISE

FTSE 100 real estate investment trust companies British Land BLND.L, Hammerson HMSO.L and Land Securities Group LAND.L rose 0.8-2.5 percent as Credit Suisse upgraded its stance on the sector to "overweight" in a strategy note.

Mid-cap UK real estate firms were also boosted as Barclays Capital started its coverage of three of the firms in the sector, Derwent London DLN.L, Capital & Counties CAPCC.L and Great Portland Estates GPOR.L, with an "overweight" stance, pushing the shares up 1.4-2.1 percent.

Software group Autonomy Corp AUTN.L climbed 2.7 percent, aided by an upgrade in its target price by Panmure Gordon in a note that highlighted strong results from U.S. tech firms.

Airplane parts maker GKN GKN.L rose 0.9 percent, adding to gains of 3 percent made on Thursday, helped by an upgrade in rating from Societe Generale and ahead of a pre-Christmas trading statement.

On the second line, retailers suffered, with Dixons DXNS.L down 5.3 percent as UBS downgraded its rating on the electrical retailer to "neutral" from "buy" and kept its "underweight" stance on the non-food retail sector.

Fashion retailer SuperGroup SGP.L was the top FTSE 250 .FTMC loser, down 6.2 percent, extending losses since its first-half results on Wednesday.

There was no important British economic data due on Friday, but investors will keep an eye on U.S. November lead indicators, which are scheduled for release at 1500 GMT. (Editing by Will Waterman)