The headquarters of Germany's Deutsche Bank is photographed early evening in Frankfurt, Germany, January 26, 2016. REUTERS/Kai Pfaffenbach

(Reuters) - Rating agency Standard and Poors (S&P) on Thursday said it cut Deutsche Bank AG’s Tier 1 securities rating to B+ from BB- and also lowered Deutsche Bank Capital Finance Trust I perpetual Tier 2 instrument rating to BB- from BB.

S&P said the bank’s 4.3 billion euros pro forma payment capacity for 2017 should be sufficient to enable continued Tier 1 interest payments, but its German GAAP earnings prospects are difficult to foresee amidst restructuring and volatile market conditions.

The rating change with a stable outlook reflects the expectation that the Frankfurt-based bank will make steady progress during the next two years towards its financial and operational targets for 2020, S&P added.

Shares of Deutsche Bank have fallen about 40 percent since the start of this year as shareholders expressed doubts over the management’s execution of its two-year turnaround plan, announced last October.

The bank, seeking to reassure investors, said on Monday it had “sufficient” reserves to make payments due this year on AT1 securities.

Deutsche Bank is also looking at buying back several billion euros worth of its debt in an effort to reverse the falling value of its securities, the Financial Times said on Tuesday.

However, S&P expects the German bank’s profitability to remain relatively poor in 2016-2017, due to restructuring charges and likely further litigation provisions.