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The company cited the impact of the global economic downturn on Irish banks and the damage inflicted on the industry's reputation by recent events involving Anglo Irish Bank, reports the Irish Times.
In a statement, S&P said: "We consider that all Irish banks face major near-term challenges from the economic downturn. In our view, the adverse economic environment has led to a very weak outlook for asset quality."
The firm predicted that revenues at Irish banks will be put under considerable pressure as a result of low interest rates and much lower transaction volumes.
S&P is the foremost provider of independent credit ratings, indices, risk evaluation, investment research and data.
The company operates in numerous countries including the US, Canada, Korea and Russia.
