UPDATE: Brave investors might want to buy the dip on these 2 Catalonia-based banks
By Victor Reklaitis, MarketWatch
CaixaBank and Banco de Sabadell aren't very Catalonian in their revenue, and total independence looks unlikely, bully says
Investors have grown accustomed to the slog of the Brexit process, and Grexit feels like ancient history.
So it's Catexit, as some have dubbed Catalonia's potential break with Spain, which is now rattling the markets. The region's officials said preliminary results of a Sunday referendum, which was marred by violent clashes and boycotted by opponents, showed overwhelming support for independence (http://www.marketwatch.com/story/catalonia-leader-with-90-approval-we-have-the-right-to-be-independent-2017-10-01). Political maneuvering should continue in the weeks ahead.
Brave investors might want to consider two Catalonia-based banks. CaixaBank (CABK.MC) and Banco de Sabadell (SAB.MC) aren't very Catalonian in terms of revenue bases, and they have other strengths, too. What's more, the bulls say that total independence is unlikely.
See:5 things investors need to know about Catalonia's independence referendum (http://www.marketwatch.com/story/5-things-investors-need-to-know-about-catalonias-independence-referendum-2017-09-28)
And read:Referendum isn't about ethnic nationalism, says longtime Catalonian political leader (http://www.marketwatch.com/story/sundays-referendum-on-independence-from-spain-is-not-about-ethnic-nationalism-longtime-catalonian-political-leader-2017-09-30)
CaixaBank is the best bet among Spain's domestically focused banks, say Jefferies analysts, who favor it over rivals Sabadell, Bankia (BKIA.MC) , and Bankinter (BKT.MC) . Shares of CaixaBank have been driven this year by the view that it is particularly well positioned to benefit from rising interest rates. If rates don't end up rising, CaixaBank would weather the setback better than its peers, says Jefferies analyst Benjie Creelan-Sandford. "Bankia, Bankinter, and Sabadell still have very strong hedging contributions supporting current net-interest income, and if rates don't rise, that's going to run out and going to be a pressure [on profit margins]. CaixaBank is less exposed to that," he says.