Financial Business Recap: Morgan Stanley UPGRADED, Goldman Sachs DOWNGRADED

Royal Bank of Scotland’s (NYSE:RBS) Direct Line Insurance division expects to eliminate an unreported number of jobs as part of its plan to save £100 million per year by the end of 2014. The bank intends to float Direct Line later in 2012. In the meantime, RBS’ first half operating profit increased by 7 percent to £224.2 million.

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On Tuesday JPMorgan upgraded Morgan Stanley (NYSE:MS) to Overweight with a $20 price target and downgraded Goldman Sachs Group Inc. (NYSE:GS) to Underweight. Goldman was praised for its “best-in-class risk management,” but JPMorgan believes that shares are too rich for the current weak investment banking environment, and also places the firm last among global investment banks in that area.

The ongoing debt crisis in Spain could impact the upcoming initial public offering of Banco Santander S.A.’s (NYSE:SAN) Mexican division. Buyers of shares might want to monitor the home company’s actions, as a fund manager remarked that “Who knows when they might sell the next 10 percent?”, referring to capital requirements in Spain that could force Santander to pressure its Mexican business’ stock price as it unloads more shares.

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