Moody's Investors Service said it had placed Deutsche Bank AG's ratings on review for possible downgrade, citing rising execution hurdles as the bank tries to stabilize profits over the next three years.
Moody's move comes days after the German bank warned that volatile financial markets in the first quarter, normally a strong season for banks, posed a challenge for the entire sector.
Moody's said a potential downgrade to Deutsche Bank's Baa1 senior debt and A2 deposit ratings would be limited to one notch.
The ratings agency will also review the bank's additional tier 1 securities (Ba3), which could result in up to a two-notch downgrade for these securities, pushing them deeper into junk territory.
Moody's said on Monday the review would focus on the details of the bank's execution plan for 2016 and 2017, and the extent to which it would have to be adapted given challenges in the operating environment.
The review will also focus on details and timing to renew the bank's technological platform, which Moody's called a key source of future revenue and cost savings.
Moody's said revenue and expense headwinds may delay an improvement in profitability, adding that the scale of the turnaround plan, the potential for weaker revenue, and the risk of more litigation also create uncertainty.
Deutsche Bank scrapped board bonuses this year after posting a record loss for 2015 in January, with Chief Executive John Cryan urging investors to be patient with his revamp of Germany's largest lender.
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