(Reuters) - Earnings of large U.S. banks would be hit by 1-6 percent this year if Britons vote in favor of leaving the European Union next week, according to brokerage Keefe, Bruyette & Woods (KBW).

Britain's exit could increase costs and weaken capital market activity, hurting banks such as Goldman Sachs Group Inc <GS.N>, Morgan Stanley <MS.N>, JPMorgan Chase & Co <JPM.N>, Citigroup Inc <C.N> and Bank of America Corp <BAC.N>, KBW analyst Brian Kleinhanzl wrote in a note on Thursday.

Morgan Stanley and Goldman Sachs, with large exposure to the capital markets, are expected to be the worst hit, Kleinhanzl said.

"Banks may have a two-year transition period and they could experience both revenue and expense headwinds during the transition," he wrote.

For 2017, the impact on these banks' earnings per share would be 2-9 percent, he said.

U.S. mortgage lender Wells Fargo & Co <WFC.N> is likely to be least impacted by a "yes" vote on June 23, the brokerage said.

However, in the longer term, the impact of Brexit is expected to be "a wash for U.S. universal banks," Kleinhanzl said.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Kirti Pandey)