The agency said Bank of Ireland and AIB hold large stocks of impaired loans. It expects their profits to come under pressure as competition builds in the mortgage market.
The moves come after Fitch completed a global review in which it assessed the likelihood that governments would bail out banks.
Five Spanish, four Italian, four Portuguese, and four Austrian banks were among the lenders whose debt ratings were cut, along with Germany’s two biggest lenders.
The reductions follow policy changes aiming at winding down failing banks by tapping investors rather than taxpayers or governments after the ECB took charge of the eurozone’s 120 largest banks last year.
In Spain, the near collapse of Bankia in 2012 cost taxpayers about €22bn and forced the government to seek over €40bn of European funds.
“Fitch believes legislative, regulatory, and policy initiatives have substantially reduced the likelihood of sovereign support for US, Swiss, and European Union commercial banks,” the agency said.