Credit rating agency S&P Global Rating has raised the outlooks on both Bank of Ireland and AIB to "positive" from "stable".
S&P said it expects the risk-adjusted profitability of the two banks to remain solid despite the declining interest rates.
"We expect the banks' sound risk management, together with their stronger and more efficient franchises thanks to advancing digital capabilities, could help close the gap with higher rated peers," S&P said in a statement.
S&P said the revised positive outlook reflects its view that after recording strong profitability over the past quarters, AIB and Bank of Ireland should continue to post solid risk-adjusted returns over the next couple of years.
It also it also anticipates that sound risk management, together with stronger and more efficient franchises thanks to improving digital capabilities, could help close the gap with higher rated peers.
"We expect AIB and Bank of Ireland to maintain good asset quality and to manage other risks," the rating agency added.
S&P said it could revise both banks' outlook to stable if it observes a set-back in their profitability or if it anticipates that risks will remain relevant.
