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Dublin. Moody’s on Monday cut its ratings on Ireland’s beleaguered banks as a consequence of last week slashing its ratings for the country’s bonds.

“Moody’s Investors Service has today downgraded the ratings of several Irish banks following Moody’s rating action on the Irish government’s bond ratings,” it said in a statement.

The international ratings agency said it had downgraded by two notches the long-term bank deposit ratings of Allied Irish Banks, Bank of Ireland, the EBS Building Society and Irish Life & Permanent. It also downgraded the ICS Building Society by one notch.

Moody’s had on Friday cut its credit ratings on Ireland by two notches to Baa3, or just above junk status, citing an “expected decline” in government finances that is set to hamper the indebted nation’s recovery.

Downgrades by ratings agencies like Moody’s can ramp up borrowing costs on markets for those hit, making their funding problems more difficult to manage, while euro zone member Ireland is already struggling to service its huge debt.

Ireland’s central bank last month ordered a drastic overhaul of the nation’s stricken banking sector as the cost of bailing out its lenders was set to top 70 billion euros ($49 billion).

It came after Ireland last year needed an international bailout worth 85 billion euros.

The IMF and EU said on Friday that Ireland was making “good progress” on overcoming its economic crisis but “challenges remain” and Dublin must continue to implement relevant policies.

Agence France-Presse