The US investment bank shares BBVA's argument that the deal would be positive for the valuation and earnings per share of the merged bank.

Bank of America thinks that BBVA can still improve its offer for Banco Sabadell, which would further boos the rising trajectory of the Catalan bank's shares, according to a securities analysis report published this Thursday.

"We believe that BBVA has room to potentially improve its current bid, which would offer more upside potential. We consider that the agreement is a 'win-win' for both banks," the report details.

The US investment bank shares BBVA's argument that the deal would be positive for the valuation and earnings per share of the merged bank. However, Bank of America warns that the long regulatory approvals process pending ahead will affect BBVA's shares for several months.

In its analysis of Spanish banks, Bank of America only recommends to buy Santander, CaixaBank and Unicaja, while taking a neutral position on BBVA and Sabadell, and assessing that Bankinter shares are overvalued.

Under this view, the Bankd of America analysts have improved the target prices of Banco Santander (from US$ 5.7 to US$ 6.4), CaixaBank (from US$ 6.3 to US$ 6.8) and Sabadell (from US$ 1.9 to US$ 2.2). The price objective has remained unchanged for BBVA (US$ 12.6), Bankinter (US$ 7.9) and Unicaja (US$ 1.6).