Weekly Financial Biz Recap: Nomura’s Mass Layoffs, SunTrust Sells Coca-Cola

Here’s your Cheat Sheet to the top financial business headlines from the week…

Are these stocks a buy or sell? Let us help you decide. Check out our Wall St. Cheat Sheet Stock Picker Newsletter now >>

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.

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.

China Investment Corp. (CIC) has divested the majority of its investment in BlackRock, Inc. (NYSE:BLK), through an incremental offloading of shares over the past few months, according to the Financial Times. The company had held onto just below 3 percent, which was worth about $1 billion, and reports that it has profited from the investment, even after sustaining losses on Morgan Stanley (NYSE:MS), The Blackstone Group L.P. (NYSE:BX), and Noble Energy, Inc. (NYSE:NBL).

Don’t Miss: Here’s JPMorgan’s New Flip-Flop on Facebook’s Stock.

Residuals from the Libor scandal continue as a regulatory filing reveals that The July “discharge” of a managing director of Barclays PLC (NYSE:BCS) originated over a “loss of confidence (for failing) to properly supervise individuals on his team.” Additionally, one of the director’s traders was sacked for “communications involving inappropriate requests relating to Libor.”

Shares of BlackRock, Inc. (NYSE:BLK) are undervalued by approximately 20 percent even if it has to reduce the fees on its line of iShares exchange-traded funds, says Luke Montgomery at Bernstein, who keeps his Market-Perform. Other observers feel that the company will lose income at the beginning, but the lower costs should help raise assets under management over time.

Don’t Miss: FedEx Echoes GLOBAL SLOWDOWN Fears.

Hartford Financial Services Group Inc. (NYSE:HIG) is divesting its Retirement Plans division to Mass Mutual at a price of $400 million while it continues to bring the firm back to its core property-casualty insurance underwriting business. Hartford’s large shareholder John Paulson has demanded this turn in the company’s strategy.

The Blackstone Group L.P. (NYSE:BX) is closing a new $13.3 billion property fund, while investors are worried that the size of the vehicle could foresee lower returns, which is typically the case as the firm’s funds have got larger. However, Jonathan Gray, speaking for the firm, shrugs off the concerns, pointing to “an enormous amount of distressed real estate” among too few large firms which can take advantage adding that “We think this is a terrific environment through which to generate attractive returns.”

Capital One Financial Corporation (NYSE:COF) has set the pricing of a secondary offering while ING divests its 54 million share investment in the firm. The transaction should close on September 10th and Capital One says again that it is not selling any shares in the offering.

Mall owner firm General Growth Properties (NYSE:GGP) is searching for an investment bank to hire, but the reason for the search is unknown, according to Reuters. Around a week ago, Bill Ackman accelerated the pressure on the firm to put itself up for sale, but so far it is uncertain whether GGP is hiring a bank as a defensive strategy or if it agrees with Ackman, who owns 10.5 percent, and wants a sale.

The United Kingdom’s Financial Services Authority has begun an official inquiry into how Lloyds Banking Group plc (NYSE:LYG) kept up with the commissions it paid to staff members who sold its financial products, says the Wall Street Journal. The investigation follows FSA interviews of over 20 financial institutions, and Lloyds has been found to have been particularly aggressive. The firm already set aside a reserve of £4.3 billion for the allegedly wrongful selling of payment-protection insurance.

American International Group Inc.’s (NYSE:AIG) proposed divestiture of a portion of its AIA Group investment all has to do with repurchasing shares from the United States Treasury, as the board okays a buyback program of up to $5 billion, while the AIA sale could bring $2 billion.

Nomura Holdings, Inc. (NYSE:NMR) in conducting mass layoffs due to regulation, deleveraging, tech, and the firm’s own particular errors mandate another makeover. A trader told Charlie Gasparino that “There is no equities business left”.

Don’t Miss: These 5 Major Banks LOVE Mario Draghi.

Annaly Capital Management, Inc. (NYSE:NLY) will buy back $600 million in 4 percent convertible senior notes that are due in 2015. This move appears to be in line with the company’s typically conservative financing aims, as it prolongs the average days to maturity of its repo agreements.

A federal appeals court has reinstated a lawsuit that had been previously tossed, which alleges that Goldman Sachs Group Inc. (NYSE:GS) mislead investors in 2007 concerning the risks of mortgage-backed securities. This is a relatively minor case, but the ruling could set a precedent for hundreds or thousands of similar claims still out there.

JPMorgan Chase & Co. (NYSE:JPM) is said to have named the senior mortgage executive Craig Delany to lead its newly refocused and now conservative Chief Investment Office. The Office is responsible for investing the cash that accumulates when loan totals are less than deposits.

The European Central Bank move has prompted Banco Santander S.A. (NYSE:SAN) to take advantage the new optimism on the Continent, by offering €2.5 billion of 3.5 year paper, hoping to price it at the same yield for which it sold 2-year notes a month ago. Order books closed with €6 billion in bids from around 400 accounts.

The Bank of Nova Scotia (NYSE:BNS) completes a 33 million share offering at $52, bringing a total of $1.7 billion. The proceeds will be used to fund the purchase of ING’s (NYSE:ING) Canadian operations.

The United States Treasury might attempt to rid itself of another portion of its American International Group Inc. (NYSE:AIG) investment as early as Friday night, according to Bernstein. The amount offered could reach to between $10 billion, and $15 billion. Observers had thought that the Treasury might try to exit its entire position in the third quarter, but Bernstein thinks the final sale will take place in the fourth.

The management of Goldman Sachs Group Inc. (NYSE:GS) remains confident that the bank can return to delivering 20 percent return on equity, says Jeff Harte at Sandler O’Neill after meeting with three company executives.

Don’t Miss: Here’s the Jobs Report Politicians Will Discuss for the Next Month.

SunTrust Banks Inc. (NYSE:STI) divests its investment in The Coca-Cola Company (NYSE:KO), which should bring a $1.9 billion pre-tax gain. The bank will post approximately $375 million in mortgage buyback provisions during the third quarter, raising its mortgage repurchase reserves to levels that should cover the remaining loan demands sold to GSE’s before 2009.

Colony Financial, Inc. (NYSE:CLNY) has begun a public offering of 6 million shares of common stock, along with an option for the underwriter to buy as many as an additional 900,000 shares. The firm will use the proceeds to repay its outstanding revolving credit facility, pay for additional investments, and also use for working capital and general corporate purposes.

The National Credit Union Administration has brought a lawsuit against UBS AG (NYSE:UBS) for alleged misrepresentations while selling more than $1.1 billion worth of mortgage bonds to credit unions U.S. Central Federal and WesCorp. The unions later failed, and “were not aware of the untrue statements or omissions of material facts” when offering documents and they thought that their risk was minimal, when it was actually substantial.

Are these stocks a buy or sell? Let us help you decide. Check out our Wall St. Cheat Sheet Stock Picker Newsletter now >>