Moody's downgraded the long-term bank deposit ratings of Allied Irish Banks, EBS and Irish Life & Permanent by two notches to Ba2; Bank of Ireland was downgraded to Ba1.
Just last month the Republic's central bank disclosed that the cost of bailing out the bank sector could reach 70bn euros and last year the country needed an international bail-out worth 85bn euros.
The International Monetary Fund and the European Union, which are providing most of the rescue funds, said on Friday that the Republic was making "good progress" on overcoming its economic crisis.
But Moody's remains concerned about Dublin's ability to push through a restructuring of its own debts and that of the now mainly-nationalised banking sector.
A statement from the ratings agency said: "Should the intended fiscal consolidation goals not be met, a further rating downgrade would likely follow.
"Moreover, a further deterioration in the country's economic outlook would also exert downward pressure on the rating."
