• British vote to leave may lead to firms moving, analyst says
  • Banks could also face higher funding costs with `Brexit'

JPMorgan Chase & Co. warned financial-services firms from banks to insurers could pull jobs out of the U.K. in the event of Britain voting to leave the European Union.

Financial services would feel the “negative impact of Brexit” most, which could “result in jobs moving outside the U.K.,” analysts at the U.S.’s largest bank by assets wrote in a note to clients on Wednesday. British lenders would probably face higher funding costs, while stock prices are likely to be hurt by the referendum in the run-up to the event.

Prime Minister David Cameron is seeking concessions from his fellow EU counterparts over changes to Britain’s membership of the 28-member trading bloc ahead of a referendum expected later this year. Some of the U.K.’s top executives have warned a vote to leave the EU would have dire consequences for the nation’s economy and threaten the City of London’s role as a premier hub for global business and finance.

Although a vote to leave is still seen as unlikely, investors will probably focus on worst-case scenarios prior to the event, Kian Abouhossein, head of European equity research banks team at JPMorgan, wrote in the note. “There could be concern over the movement of jobs from U.K. to other countries within the EU, which would be negative for employment and the economy.”

The risk to financial-services jobs would be most pronounced if Britain fails to keep its so-called passporting arrangements with the EU, according to Abouhossein. Under current rules, a range of firms from banks to asset managers and insurers are able to operate from the U.K. without needing to set up a separate subsidiary within the EU.

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