2018 is set to be “year one” of a new post financial crisis era, as growing profits from the UK’s largest banks will absorb the economic and political shocks from 2018, according to top ratings agency, S&P Global Ratings.

The ratings agency said that the prospect of rising interest rates, the implementation of ring-fenced retail banks and the beginning of open banking will “leave the legacy of the financial crisis behind”, in a report published yesterday.

After an improvement in 2017, the banking sector’s capital, funding and liquidity positions are “robust”, whilst signs of bank loan books getting worse seem limited.

S&P Global Ratings analysts commented: “We now view it as more likely that earnings will prove to be a more useful first line of defence in the event of economic weakness or political disruption.”

Over the course of 2018, net income is expected to increase across the sector, as fines for pre-financial crisis wrongdoings, such as the US Department of Justice settlement against the RBS, are beginning to diminish.

However, the chances of credit ratings improving in the banking sector are slim, warns S&P, as management teams have assured shareholders that they will pay out capital as dividends, rather than strengthening their balance sheets.

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