Credit Rating Agency UK market share report for 2024

Overview

Under Article 8d(2) of the EU Credit Rating Agencies Regulation[1] as amended by the CRA Regulations (EU Exit) 2019[2] (referred to collectively as the 'UK CRA Regulation'), we are required to publish annually the list of UK Registered CRAs, their total market share, and sector coverage. One aim of the UK CRA Regulation is to promote competition among CRAs by encouraging the use of smaller CRAs. Under Article 8d(1), if issuers or related third parties plan to use two or more CRAs, they should consider appointing at least one CRA with no more than 10% of the total market share. If they choose not to do this, they shall record their decision. This publication facilitates that evaluation by issuers.

Using the methodology set out in the section following, the market for credit ratings and related services in the UK remains highly concentrated and has slightly increased from the previous year.

As highlighted in our 2024 portfolio letter[3] to CRAs, we will continue our supervisory work to understand the effectiveness of Article 8d. We are addressing competition issues as part of our wider regulatory work in wholesale financial markets, consistent with our objectives, and our priority to support growth as outlined in our strategy[4]. The UK CRA Regulation is expected to be reviewed as part of the wider review of assimilated law and alongside international developments.

Method of market share calculation

As required under Article 8d(3) of the UK CRA Regulation, the total market share is calculated with reference to annual turnover figures generated from credit rating activities and ancillary services at group level, reported annually by each individual UK Registered CRA to the FCA for the prior calendar year.

In line with last year’s report, we continue to use the Herfindahl-Hirschman Index (HHI) as a measure for market concentration. The HHI is calculated by squaring the market share of each firm in the market and then summing the resulting numbers. Markets where the HHI lies between 1,500 and 2,500 are considered moderately concentrated, while an HHI greater than 2,500 is considered highly concentrated.

Based on the data in this Report for 2024, the UK CRA market has a HHI score of 2,843 which is a slight increase from 2,789 in 2023. This shows that the market for credit ratings and related services in the UK remains highly concentrated.

The CRA Regulation defines credit ratings as ‘an opinion regarding the creditworthiness of an entity, a debt or financial obligation, debt security, preferred share or other financial instrument, or of an issuer of such a debt or financial obligation, debt security, preferred share or other financial instrument, issued using an established and defined ranking system of rating categories.’ (Article 3 (1)). Ancillary services are defined as ‘…not part of credit rating activities; they include market forecasts, estimates of economic trends, pricing analysis and other general data analysis as well as related distribution services’ (Annex 1, part B, paragraph 4).

UK market share by CRA 2021 to 2024

Table 1 below lists the 9 UK Registered CRAs, in order of decreasing market share for 2024. We state their business model, market share percentage and direction of change from the prior year. For ease, we include a final column indicating whether the CRA has no more than 10% of total market share.

Table 1: UK market share by CRA for 2021 to 2024

Source: Final turnover figures provided by each CRA for the calendar year as of 31 December 2024. Market share figures are rounded to the nearest two decimal places.

Sector coverage by CRA

Table 2 highlights in grey, the sectors in which each UK Registered CRA has UK-issued or UK-endorsed ratings. Rating sectors are classified as follows: non-financial corporate, financial institution, insurance, sovereign and public finance, and structured finance. This table is based on rating data reported by each UK Registered CRA to the FCA ratings data system (RADAT).

Table 2: Sector type by CRA

Source: Data reported by each CRA as of 31 December 2024.