European banks have slashed their exposure to the UK since it voted to leave the European Union, removing €350bn of UK-related assets from their balance sheets in just 12 months.

According to official EU data, banks across the rest of the 27 other EU countries have reduced their total assets tied to the UK from €1.94tn to €1.59tn between June 2016 and June 2017, reported the Financial Times.

Banks’ liabilities also decreased over the same period, dropping from €1.67tn to €1.34tn, the European Banking Authority (EBA) said.

The trend is expected to increase ahead of the March 2019 Brexit deadline.

The EBA conceded that the risk of a “cliff edge” Brexit was the main cloud hanging over all of Europe’s banking system.

One third of banks the EBA polled for its annual risk-assessment exercise are concerned about the legal risks presented if the UK crashes out of the EU with no deal.