NEW YORK ( TheStreet) -- Shares of publicly traded banks in Portugal were being hammered in local trading as concerns over the country's debt crisis hit new levels.

The country's largest bank, Banco Espirito Santo SA, was down over 5% in afternoon trading on the Lisbon Stock Exchange. The nation's second largest banking institution, Banco Comercial Portugues SA , was down 3.3%.

Investors concerns rose Monday over Portugal's planned sale $1.61 billion of sovereign debt on Wednesday, according to a report from Reuters. If the sale fails to attract enough investor interest, Portugal may be forced to ask the European Central Bank or the International Monetary Fund for financial assistance, the report stated. Both Greece and Ireland were on a similar path before heading to the ECB and the IMF.

Portugal's fortunes have been in steady decline since the beginning of the European debt crisis. In late December, Portugal's long-term government debt rating was lowered from AA- to A+ and it got a "negative outlook" by Fitch Ratings.

"The downgrade reflects an even slower reduction in the current account deficit and a much more difficult financing environment for the Portuguese government and banks ..." Fitch said last month.

However, Fitch noted that despite the sovereign woes, the risk to the banking system remains limited and that local banks have been depending less on funding from the ECB.

"While the possibility that the government may inject capital into Portuguese banks to enhance their access to market funding cannot be discounted, the contingent liabilities and fiscal risk associated with the banking sector remains modest," the report said.