Ratings agency Moody's has downgraded five of South Africa's largest banks and four insurers with a negative outlook after the country's credit rating was downgraded last week.

The long-term local and foreign currency deposit ratings of Standard Bank, FirstRand, Absa Bank, Nedbank and Investec Bank were downgraded to Baa3 on Monday, one notch above non-investment grade.

The ratings agency also downgraded Standard Bank's long-term local and foreign currency issuer ratings to Ba1 from Baa3.

Moody's said the primary reason for the downgrade was weakening credit and macro profile of the South African government exerting pressure on banks in what it said was a challenging operating environment characterized by a pronounced economic slowdown.

The agency downgraded other South African banks to one notch above sub-investment grade, including the Development Bank of Southern Africa, the Industrial Development Corporation of South Africa and the Land and Agricultural Development Bank of South Africa.

Moody's also downgraded the debt ratings of South African insurance groups on Monday. Old Mutual Life Assurance Company and MMI Group were lowered to Baa2 from Baa1 while Guardrisk and Standard Insurance dropped to Baa3 from Baa2. All were given a negative outlook.

South Africa's credit rating was downgraded by Moody's on Friday, citing a recent cabinet reshuffle and reduced growth prospects for an economy mired in recession.