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Germany's BDI warns of further slump in FY industrial

production

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Split plan drives Embracer shares to four-month high

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Alstom up after North-American unit sale to Knorr-Bremse ( KNBHF )

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STOXX 600 up 0.2%

(Updated at 0828 GMT)

By Johann M Cherian

April 22 (Reuters) - European shares edged higher on

Monday with investors bracing for earnings reports from several

big banks later in the week, while Portuguese oil firm Galp

soared to a 16-year high following a positive update to its gas

exploration in Namibia.

The pan-continent STOXX 600 was up 0.2% by 0828

GMT, supported by a 0.3% gain in banking stocks.

Earnings reports from European lenders will be in the

spotlight this week as investors are likely to get a clearer

picture of whether higher interest rates are still boosting

profits or if a year-long share price rally will run out of

steam.

BNP Paribas, Deutsche Bank, Barclays ( JJCTF )

and Lloyds will report earnings later in the

week.

"We're seeing stabilisation and growth. While lending might

sequentially pick up and non-performing loans might continue to

be relatively low, net interest margins are coming down," said

Maximilian Kunkel, chief investment officer, Global Family &

Institutional Wealth at UBS.

"On the other side, we're also seeing that capital

markets are opening up again and there is an increase in

(mergers and acquisitions) activity."

Overall, quarterly earnings are expected to decline

12.1% from a year-ago period, according to LSEG data on Tuesday.

Galp Energia said its Mopane field off the

coast of Namibia could have at least 10 billion barrels of oil,

sending shares of the company 17.1% higher and to the top of the

benchmark index.

The STOXX 600 posted its third straight weekly decline

on Friday as a spike in Middle East tensions sparked concerns of

a widening conflict and the possibility of high commodity prices

feeding into inflation pressures.

Shares of Alstom gained 1.5% after the French

train manufacturer agreed to sell its North American

conventional rail signalling business to German rail systems

manufacturer Knorr-Bremse AG ( KNBHF ) for around 630 million

euros ($671 million).

Embracer said it plans to split into three

separate listed companies, and that it has secured new financing

that it will use to cut debt, sending shares of the Swedish

gaming group higher by 10.3%.

Iveco ( IVCGF ) dropped 4.1%, bottoming Italy's benchmark

index after the automotive manufacturer said Chief

Executive Officer Gerrit Marx is leaving to head

Italian-American company CNH Industrial ( CNHI ).

Greece's ATHEX index gained 1.1% after credit

ratings agency S&P revised the country's outlook to "positive"

from "stable".

On the data front, Germany's industry lobby BDI flagged

that industrial production is likely to decline again this year

and exports will stagnate, painting an uncertain picture for

Europe's manufacturing powerhouse.

Investors await euro zone's April consumer confidence data

and comments by ECB President Christine Lagarde due later in the

day.