Moody's has raised the outlook of several British banks and building societies, with the ratings agency saying they were better positioned for a "modest worsening" in the UK's environment.
Santander and TSB banks and Nationwide, Coventry and Nottingham building societies have all had their deposit ratings from negative to stable, while the stable outlooks for three issuers - Close Brothers, West Bromwich Building Society and Yorkshire were maintained.
The baseline credit assessment of Lloyds Bank, all long-term ratings of Lloyds Bank and all short-term and long-term ratings of Lloyds Banking Group have been placed on review for upgrade.
However Moody's has lowered its UK macro profile from "very strong-" to "strong+" warning of a "likely deterioration in the operating environment in a system which is already characterised by a high level of personal indebtedness and rapid consumer credit growth".
The agency said this also reflected a slower economy and increased uncertainty surrounding Brexit following the recent general election, "which now outweigh the benefits of the UK's strong bank regulatory framework".
"We expect UK banks' solvency to remain robust, with broadly stable profitability and liquidity as well as strong funding positions, despite our expectation over the next 12-18 months of a modest deterioration in operating conditions," said Laurie Mayers, an associate managing director at Moody's.
Uncertainty over the UK's future trading relationship with the EU will lead to lower GDP over the next two years, Moody's added. It now expects the UK economy to "weaken significantly" over the rest of the year, with growth declining to 1.5 per cent this year and one per cent in 2018.
Operating conditions for banks may therefore deteriorate modestly over the next 12-18 months, with a more sluggish economy, higher competition and continued low interest rates eroding banks' revenues and modestly weakening the credit quality of their loan books.
Yet despite this, Moody's said UK banks' solvency would remain robust, profitability will be broadly stable and liquidity and funding positions will remain strong.