The loan portfolios of Irish banks have likely deteriorated "close to the stress scenario of 2011 prudential capital assessment review", according to ratings agency Fitch.
The agency said that "persistent vulnerabilities remain" in the sector, which would be sensitive to the progress of the economy and attempts to work out bad loans.
Fitch maintained its long-term bond rating for Ireland at 'BBB+', with a stable outlook.
It said it did not anticipate developments that would require a downgrade, however the potential need for further bank recapitalisation by the State, or weaker-than-expected economic performance, could impact that.
On the contrary a fundamental improvement in bank’ assets and profitability, or sustained medium-term growth, could see the country’s rating improve.
Fitch said Ireland would leave its bailout highly indebted “with modest medium-term growth potential”.
It said the country had progressed further with its fiscal consolidation programme during 2013 and it predicts a primary budget surplus to be achieved next year.
It also anticipates that the gross general government debt to GDP radio will peak at 122% next year, while GDP growth of 1% will also be recorded following two years of stagnation.