Spain's three largest lenders are facing regulatory changes and exposure to Mexico that are partly overshadowing an otherwise solid quarterly performance from one of Europe's largest banking sectors.

CaixaBank (CIXPF) reported gross income of €1.8 billion ($1.92 billion) Thursday, a solid 8% beat against expectations, which also meant a considerable beat for pretax income.

But impairments were larger than expected, thanks to tax changes and central bank mandated adjustments to internal models, which meant the lender's €77 million net income for the period was considerably below expectations.

CaixaBank shares were 3.7% higher at 14:15 GMT, changing hands at €3.53 each after a volatile start to the session. Out of the 19 analyst recorded by Factset (FDS) - Get Report as covering the stock, seven of them rate it a hold, while six tip it as a buy and four have recommended selling.

"Trends at Spanish banks have been messy this quarter due to implementation of the new circular, which at CaixaBank saw a release of €676m provisions on NPLs offset by higher provisions on real estate assets," said Benji Creelan-Sandford at Jefferies.

Thursday's results added further to an already mixed bag for Spain's top lenders, which have to content with a European Court ruling that they must reimburse customers for applying illegal floors to mortgage payments, as well as central bank changes to risk weights for mortgage and real estate assets.

On Wednesday, BBVA (BBVA) - Get Report reported a 33% beat to consensus for net income in the fourth quarter, with business units in Mexico, Spain and the U.S. all performing strongly.

However, concerns over the future outlook for the Mexican economy, and the country's increasingly hostile relationship with the United States, have weighed on sentiment toward the shares ever since the release, pushing them 1.4% lower at €6.10.

Out of the 24 analysts recorded by Factset as covering the stock, ten of them rate it a hold, while nine tip it as a buy and five have recommended selling.

The lender generates 65% of profits from Mexico, which are now at risk from a weaker currency and threats of aggressive protectionist measures coming from the new administration in the White House.

"As flagged in our recent report ... we expect Mexican uncertainties to continue over the coming months, affecting the stock owing to the region's high sensitivity to the economic outlook," said Andrea Unzueta at Credit Suisse (CS) - Get Report .

The results from Spain's second and third largest lenders follow closely behind, and contrast with, those of Banco Santander (SAN) - Get Report .

Spain's largest bank reported a solid fourth quarter last week, with a 9% beat against the consensus for net income, which came in at €1.6 billion ($1.72 billion).

"We continue to see an ongoing recovery in the Brazilian business supported by a currency tailwind as a key earnings driver, an ongoing earnings recovery in Spain despite some further revenue headwinds, and a fairly robust outlook for the UK business," said Rohith-Rajan at Barclays (BCS) - Get Report .

Santander stock gained nearly 7% following the announcement but has since pared gains and is now trading 1.38% above its pre-results price, at €5.28.

Out of the 23 analysts recorded by Factset as covering the stock, ten of them rate it a hold, while eight tip it as a buy and five have recommended selling.