US custody banks could be hampered by Britain’s exit from the EU given their revenue exposures to the region.

Northern Trust, BNY Mellon and State Street have the largest base of non-US revenues across the US banking sector, according to analysts at Jefferies, ranging from 30%-40% with EMEA generally the largest portion.

Meanwhile investment banks, including Bank of America and J.P Morgan, have smaller but decent sized EMEA revenue bases, between 7%-14%, with Citi the largest overall non-US revenue generator.

“The list of challenges for the sector continues to lengthen,” said New York-based Jefferies analyst Ken Usdin in a note to clients.

With Brexit, Usdin added that obvious concerns for pre-provision income re-emerge. 

"These concerns include low rates, fee pressure from investment banking, capital markets and asset management and higher costs for universal and trust banks.”

In recent years the trust/custodian banks have continued to focus on core asset servicing and asset management offerings.

Investment banks, meanwhile, have  integrated their offerings into market-related businesses, i.e execution and clearing.

In a note to clients, Michael Cole-Fontayn, BNY Mellon’s EMEA chairman, said whatever the outcome of the upcoming Brexit negotiations, operational continuity and resilience is the primary focus for BNY Mellon.

“First and foremost, BNY Mellon is ready to handle the market volatility and high volumes anticipated as the implications of Britain’s vote to leave decision become clearer.

"We are focused on managing assets and risk for our clients, and ensuring all payments settlements, valuations and collateral movements are processed efficiently."

Looking ahead, Cole-Fontan added that BNY Mellon will remain in constant communication with regulators. 

"We have the flexibility and resources to adapt to any necessary infrastructure change which may be needed as a result of the formal UK-EU relationship and market access protocols negotiations."

Katie Nixon, chief investment officer for Northern Trust's wealth management business, said the firm staying the course at this time, preferring to rely on a more fundamental analysis of the potential outcomes over an emotional response. 

"We expect that global capital markets will remain volatile over the short, and perhaps even intermediate terms, as investors continue to assess the various impacts of Brexit. 

We are monitoring conditions closely. We recognize that the surprise “leave” vote presents a clear headwind to investor confidence, and perhaps will have a more tangible impact on the global economy and on corporate earnings."