* Oils, pharmas gain ahead of Q3 results this week
* Shire leads drugmakers higher on Vyvanse news
* British Airways falls on antitrust threat, downgrade
By Harpreet Bhal
LONDON, Oct 26 (Reuters) - Britain's top shares edged up 0.2 percent by midday on Monday as energy firms and drugmakers gained ahead of third-quarter earnings this week, outpacing a decline in banks and life insurers.
At 1150 GMT, the FTSE 100 was up 10.90 points at 5,253.47 points. Gains were exaggerated by thin volumes, with the index trading at just 24 percent of its average 90-day trading volume.
Energy firms added the most points to the index as crude prices hovered around $80. BP and BG Group, which report third-quarter earnings on Tuesday and Wednesday respectively, were up 0.7 and 0.1 percent while Royal Dutch Shell and Tullow Oil put on around 0.7 percent each.
Drugmakers also saw good demand ahead of third-quarter numbers from the sector. Shire, AstraZeneca and GlaxoSmithKline were up 0.2 to 2.5 percent.
Shire got a boost from news that the U.S. Food & Drug Administration has determined that the firm's key attention deficit disorder treatment, Vyvanse, was properly granted five-year market exclusivity. With the U.S. reporting season in full swing, analysts said investors are now focused on third-quarter results from UK firms this week which would dictate the direction for equities.
"This (is) ... the first week when the UK corporate reporting season really gets into full swing," said Richard Hunter, head of UK equities at Hargreaves Lansdown.
"Most investors are going to be keeping their powder dry until they digest the many corporate results we have got coming on stream as the week progresses."
Defensive issues also lent some support to the index, with heavyweight Vodafone up 0.5 percent and household cleaning products firm Reckitt Benckiser up 1.5 percent.
Cable & Wireless rose 2.3 percent, benefiting from a report in the Sunday Times that the company has revived plans for a 3.6 billion pound demerger, a year after putting a proposed split on hold.
BANKS UNDER PRESSURE
Banking stocks were on the back foot, led by falls in part-nationalised lenders Lloyds Banking Group and Royal Bank of Scotland, which were down 4.3 and 3.1 percent, as cash call concerns continued to worry investors.
HSBC shed 0.6 percent, impacted by a downgrade to "hold" from "buy" by Citigroup, while Barclays was off 1.5 percent.
British banks must give breakdowns of bonuses by the end of the week or they will need to use the cash to beef up reserves, the Sunday Times reported quoting Adair Turner, head of Britain's banking regulator.
Meanwhile, retail banks should be stopped from paying big cash bonuses and use the money instead to support new lending, according to the text of a speech to be given by the opposition Conservatives' finance spokesman on Monday.
British Airways lost 3.8 percent after a Financial Times' report said the airline, along with Iberia and American Airlines , may have to give up take-off and landing slots to satisfy EU conditions for a proposed tie-up.
Deutsche Bank downgraded its stance on BA to "sell" from "hold", citing tie-up risks.
Life insurer Prudential lost 1 percent, weighed on by a rating downgrade to "hold" from "buy" by SG Securities on valuation grounds.
Legal & General, RSA Insurance, and Standard Life fell 0.2 to 0.8 percent.
Standard Life is not looking to sell off its underperforming Canadian business, according to a source, despite a newspaper report saying that it had asked its advisors to review the unit.
(editing by Tiisetso Motsoeneng and John Stonestreet)