What’s Behind Financials’ Post-Election Dive?

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Although the financial sector mirrored the broader market sell-off on Wednesday, one analyst still sees upside for banks' book value and earnings despite regulatory uncertainty.

Hours after Mitt Romney conceded a highly competitive race to President Barack Obama, stocks were firmly in the red due to worries about further regulation and the upcoming "fiscal cliff" — a concern that has already cropped up in earnings reports.

"If you listen to third-quarter earnings calls, most bank CEOs talked about slowing loan growth, and the number one reason they gave is corporate borrowers' reluctance to take on additional leverage in the face of fiscal cliff uncertainty," said Jason Goldberg, senior equity analyst at Barclays Capital. (Read More: CEOs to Washington: Get a 'Fiscal Cliff' Deal Done)

Despite Capitol Hill's indecision, banks posted third-quarter earnings that Goldberg described as "generally constructive." Both the book value and earnings of most banks grew during the quarter — a trend that he thinks can continue into next year.

"The majority of banks we cover beat consensus expectations for the third straight quarter, driven by improved mortgage and capital markets results," he said.

Fiscal cliff worries are being compounded by concerns that the Obama administration will continue its stance on stronger financial regulation. Before the election, industry participants had been hopeful that Republican candidate Mitt Romney would be softer about financial reform and regulation, possibly even scaling it back if he were elected.

"The concern now with Obama is it's kind of status quo and further implementation of the Dodd-Frank regulation," he said.

Although only about one-third of Dodd-Frank rules have been written, Goldberg forecasts that regulation will not get worse.

But with doubts surrounding the fiscal cliff and regulation fogging Wall Street's clarity, investors are proceeding with caution.

"Clearly you're in uncertainty right now, and bank stocks and stocks in general tend not to like uncertainty," he said.

—By CNBC.com's Katie Little; Follow her on Twitter @katie_little

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One of the analysts on the coverage team (or a member of his or her household) owns shares of the common stock of Citigroup and JPMorgan Chase.