UK banks could be downgraded in the event of a no-deal Brexit, according to ratings agency Standard & Poor.
The agency's position is that the UK will successfully negotiate a deal that provides a period of continuity for financial institutions, however it said that if the UK crashes out of the European Union in March next year, British banks would be hit hardest.
"In our view, UK banks would be the most vulnerable banks under a disruptive Brexit," the research note said.
"For the UK a disruptive Brexit could likely lead to a domestic political crisis and in turn the economy contracting, leaving the property market vulnerable if unemployment rose abruptly," it added.
"While we recognise on the whole that UK banks' earnings and balance sheets are solid and provide a substantial cushion to withstand potential turbulence from political and economic events - indeed these strengths contribute to our current stable view of the sector - their current ratings and/or outlooks may not prove to be consistent with a disruptive Brexit accompanied by a severe economic shock."
Earlier this week the Bank of England reiterated its stance that the UK banking system is strong enough to withstand a no-deal Brexit.
In the event of a worst-case scenario around the economic impact of Brexit, including the unemployment rate rising to 9.5 per cent and residential property prices falling by 33 per cent, banks would still be able to serve UK businesses and households, the financial policy committee said.
However, it doubled down on calls for the EU to put measures in place to allow European banks to access UK-based clearing houses after Brexit.
City lobby groups echoed the Bank's plea, urging the EU to stop using clearing as a bargaining chip in a "game of high-stakes political poker" which could damage global financial stability.