Popular Takeover Turns Attention to Weak Spanish Bank Rivals

Investors who think Spain’s banks are out of the woods may want to look more closely. The rescue of Banco Popular Espanol SA may even complicate their recovery in some cases.

Spain has come a long way since the collapse of its real estate market upended the industry and provoked a severe recession. The economy is growing at one of the fastest rates in the region and joblessness, while still in the double digits, is declining. Five years after the government spent 41 billion euros ($46 billion) in European funding to bail out lenders, the best-performing European bank stocks this year include three Spaniards -- Banco Sabadell SA, CaixaBank SA and Banco Santander SA, the country’s biggest.