S&P Global Ratings on July 19revised its outlook on DeutscheBank AG to negative from stable and affirmed the BBB+/A-2 issuercredit ratings on the bank.

At the same time, S&P GlobalRatings revised the outlook on certain Deutsche Bank branches and subsidiariesto negative from stable. The ratings of these entities were affirmed.

The negative outlook reflects theagency's view of the execution challenges facing Deutsche Bank as itrestructures its business model and balance sheet. "We regard 2016-2017 asthe most demanding phase of Strategy 2020 and we see a risk that generallyunfavorable operating conditions could challenge the achievement of itsgoals," S&P Global Ratings said, adding that in assessing the bank'sprogress, it intends to focus on the bank's capital generation prospects for2017 and beyond, its performance versus peers and its ability to defend itsmarket position in its core businesses.

The agency said the U.K.'s recentvote to leave the EU "is a consideration in the outlook revision, but nota prominent one." According to S&P Global Ratings, Deutsche Bankshould not be materially affected if the U.K. were to lose access to the EUfinancial services passporting arrangement, although the German lender mightneed to relocate some activities from its London branch. The agency said thatin the longer term it sees Brexit as a factor that may prolong the currentperiod of ultralow global interest rates and depressed business volumes.

S&P Ratings and S&P Global Market Intelligence are owned byS&P Global Inc.