Moody's Investors Service said Monday it had lowered its ratings on five Irish banks following its downgrade of Ireland's sovereign debt last week. The agency said that the sovereign downgrade could affect the Irish government's capacity to support the banking sector, which has been struggling with a collapsed property market and the impact of the global finance crisis.
The lenders targeted by Moody's on Monday were Allied Irish Banks, Bank of Ireland, EBS Building Society, Irish Life and Permanent and Irish Nation-wide Building Society. The agency last week hit the Irish government with a five-notch downgrade of its debt to Baa1 with a negative outlook, citing increased uncertainty over the country's economy and public finances. "Moody's concludes that the banks' debt ratings are affected by the downgrade of the Irish government," the agency said in its statement Monday.