LONDON (Reuters) - European shares extended losses in late afternoon trade on Wednesday, tracking further declines on Wall Street as financials weighed on equity markets on both sides of the Atlantic.

Financials dragged after U.S. investment bank Morgan Stanley (MS.N: Quote, Profile, Research) said its earnings dropped by more than half and Fifth Third Bancorp (FITB.O: Quote, Profile, Research) announced a dividend cut and a plan to raise capital.

In Europe, Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and UBS (UBSN.VX: Quote, Profile, Research) were among the top weighted losers on the FTSEurofirst 300 index , each shedding more than 3.5 percent. HSBC (HSBA.L: Quote, Profile, Research) dropped 1.2 percent and Santander (SAN.MC: Quote, Profile, Research) lost 2.4 percent.

The FTSEurofirst 300 fell 1.6 percent at 1,248.33 by 1444 GMT, while U.S. stock indexes were all down by about 1 percent.

(Reporting by Rebekah Curtis)