European shares extended losses on Tuesday morning, with banks the biggest fallers after disappointing results from UBS (UBSN.VX) and a shake-up of UK banks.

At 1007 GMT, FTSEurofirst 300 .FTEU3 index of leading European shares was down 1.9 percent at 961.61 points, and had hit a day's low of 959.46, the lowest in a month.

Shares in UBS (UBSN.VX) fell 5.7 percent, hitting a more than two-month low, after the bank reported larger-than-expected asset outflows for the third quarter.

Banks were further hit by the shake-up involving the UK's two biggest lenders, Royal Bank of Scotland (RBS.L) and Lloyds (LLOY.L), down 2.5 and up 2.9 percent respectively.

BNP Paribas (BNPP.PA), Banco Santander (SAN.MC) and HSBC (HSBA.L) were down between 3.3 and 3.9 percent.