According to a report by the Boston Consulting Group, securities firms could be pushed to exit some trading businesses and the global investment banks’ revenue could be reduced by about $8 billion due to Britain’s vote to leave the European Union.

The consulting firm wrote in a research report published recently that from a total of $228 billion in 2015, the revenue from mergers and acquisitions advice, equity underwriting, bond sales and securities trading is forecast to fall to about $204 billion in 2016. The direct consequences of Brexit, which has the potential to cut M&A fees in the European region by as much as 60 percent, had forced a revision of the estimate to come down from $212 billion.

The plans of companies to grow or acquire other companies have been threatened by Brexit which has plunged global businesses into the dark over the U.K.’s future relationship with the world’s largest trading bloc. The report said that banks that are already struggling in those areas may choose to bow out instead since they are likely to face high costs of moving some trading units to other EU nations.

“For some banks, Brexit could accelerate their withdrawal. Brexit will likely affect both the short-term revenue outlook, through market shocks and loss of business confidence, and the long-term revenue outlook through disruptive business transformation,” the authors led by Philippe Morel wrote in the report.

Costs and headaches in both directions could be boosted by the political decision. The report states that with about 10 billion euros of capital needed to convert branches of German banks into U.K. subsidiaries, capital requirements at European firms in the City may climb by as much as 40 billion euros ($45 billion).

According to the report some of the nearly half of trading volume in London that relates to Europe may be forced to move to other nations. While M&A advisory and commodities and currency trading have better chances of staying in London, euro-denominated derivatives and credit trading are more likely to have to move, BCG said.

The report also states that moving staff and activities will probably increase costs in Europe by 8 percent for banks who already have significant operations in many European countries. With the potential to increase annual costs by 22 percent in the region, banks without a significant European presence outside London would need to build new operations.

“Clearly, the ability of banks to center their operations and maintain scale in a single,  well-capitalized London entity is now uncertain. We are forced to consider a bifurcated U.K./EU environment in which banks will have to manage and maintain two separately-capitalized units, including a split liquidity pool that is able to serve only particular clients or offer particular products,” according to the report.

The “sharpest short-term decline due to protracted uncertainty, high volatility, and lower confidence in markets” would probably be witnessed by revenue from M&A advisory and underwriting stocks and bonds. BCG expects global revenue to fall by 32 percent to $40 billion this year while the impact will predominantly affect Europe, the Middle East and Africa revenue.

BCG raised questions over the sustainability of high client demand while trading income could benefit from the uncertainty in the short term. The reports said that as banks shift operations to lower-margin electronic platforms, revenue will probably decline.

(Adapted from Bloomberg)

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