Ratings agency Moody's on Monday downgraded four Irish banks and an insurer, including some of the liabilities guaranteed by the government — a reminder of the financial mess the country faces at it begins to draw on an international rescue loan.

Moody's Investors Service said it had lowered ratings on bank deposits, senior debt, bank financial strength and most of the junior securities of Allied Irish Banks, Bank of Ireland, EBS Building Society, Irish Life & Permanent and Irish Nationwide Building Society.

The downgrade followed Moody's announcement on Friday that it was slashing Ireland's sovereign credit rating by five notches to Baa1 — just three steps above junk-bond status.

"The banks' debt ratings are affected by the downgrade of the Irish government, as the high degree of systemic support from the government had so far largely mitigated the pressure stemming from a much weaker standalone credit profile of these banks," the rating agency said.

Banks will come under further pressure because of the government's drastic austerity package of tax hikes and spending cuts, Moody's said.

And while the agency said it welcomed the government's intention to restructure the banking system, "it leaves each of the banks, individually, in an uncertain position."

Separately, Allied Irish Bank announced that it had transferred 9.3 billion euros ($12.2 billion) in loans to the National Asset Management Agency — a so-called "bad bank" where bad loans and assets are ringfenced — at an aggregate discount of 59 percent.

At midday, shares in AIB were down 9.3 percent, Bank of Ireland was down 3.4 percent and Irish Life & Permanent was down 1 percent.