Fitch Ratings placed the debt ratings of struggling Deutsche Bank on negative watch Thursday given likely challenges for the German lender to implement its restructuring plan.
"A sluggish business environment, particularly in Europe but also in Asia Pacific, will make it harder for Deutsche Bank to build revenue and, therefore, capital during 2017 in line with its 2020 strategy," Fitch said in a release Thursday. "The bank needs to demonstrate its ability to improve revenue generation to maintain its 'A' Long-Term Issuer Default Rating."
"The ratings could also be downgraded if there are material setbacks to the planned capital trajectory due to incremental litigation and regulatory charges," the release said.
Deutsche Bank did not immediately respond to a CNBC request for comment.
Investor confidence in shares of Germany's largest bank is low. The U.S.-traded shares have fallen more than 50 percent since October 2015, when CEO John Cryan announced details of a restructuring program called Strategy 2020. The plan included suspension of dividends on common equity, job cuts and exits from 10 countries.
This past July, S&P Global Ratings lowered its outlook on the bank to negative, citing challenges to that turnaround plan, while affirming a "BBB+/A-2" credit rating.
Deutsche Bank came under renewed scrutiny in mid-September when it surfaced that the U.S. Department of Justice was demanding $14 billion to settle with the bank over its mortgage-lending activities before the recession. The bank's shares hit record lows in New York trade at the end of September but have since recovered amid hopes of a lower settlement figure.
The bank and analysts generally expect the final settlement figure to be far lower than initial reports.
"Deutsche Bank has made good progress at implementing an ambitious, intensive restructuring program," Fitch said, citing asset sales and plans to reduce staff in Germany.
But the ratings firm also said, "As the bulk of restructuring expenses is front-loaded, earnings are likely to remain weaker than peers' for the rest of 2016. Improvements should be visible from 1Q17, as the benefits of cost-cutting efforts surface and earnings are less distorted by losses related to deleveraging."