Not satisfied with the surging revenues from their regular line of work, rating agencies are moving onto one another's turf.

Two of the niche companies in the field, Fitch IBCA and Thomson BankWatch, are broadening their coverage from banks to corporations and other financial sectors, such as structured transactions.

Meanwhile, the two big general-interest agencies, Moody's Investors Service and Standard & Poor's, are expanding out of bank ratings into bank loans, insurance, and other activities generally new to them.

"Is competition increasing?" asked Robin Monro-Davies, vice chairman and chief executive at Fitch IBCA in London. "I'd say yes."

For all the growing competition, U.S. bankers said they are somewhat perplexed by the duplication of efforts. Most already employ two agencies to get a balanced picture. They add that they are unlikely to use any more than that.

"Two is better than one, but I'm not sure four is better than one," said Charles L. Coltman 3d, executive vice president and head of global corporate banking at First Union Corp.

For decades, Moody's and S&P mainly rated bonds and other debt issued by corporations.

In contrast, Thomson BankWatch and London-based International Bank Credit Agency, or IBCA, focused on so-called "interbank" credit rating. That is, they emphasized rating banks on behalf of other banks doing business with them, and doing work for corporate treasurers and chief financial officers to assess the safety of banks they do business with.

That neat divisions have broken down.

Last year IBCA acquired Fitch Investors Service of New York and expanded into municipal bonds and structured issues including asset-backed securities. Moody's, a unit of Dun & Bradstreet Corp., and S&P, a division of McGraw-Hill Cos., have both been expanding their bank coverage.

Thomson BankWatch-a unit of Thomson Financial Services, which is also the parent of American Banker -is steadily increasing the number of banks it rates and developing corporate sector ratings through joint ventures.

The upshot is a sizable increase in bank ratings around the world.

Moody's now covers 600 to 700 foreign banks and about 300 in the United States; S&P has ratings on 188 U.S. bank holding companies and 695 elsewhere; Fitch IBCA rates around 750 banks and Thomson BankWatch nearly 1,100 worldwide, up from 300 to 400 five years ago.

Ratings are now done on institutions as far afield as Halyk Savings Bank of Kazakhstan, Ionian and Popular Bank of Greece, Banco del Pichincha in Ecuador, and Al Ahli Bank in Kuwait.

The agencies aren't complaining about the increased competition because demand for credit ratings is growing so fast.

"We are well aware of competition, but it's much easier to deal with competition in a market that's growing 20-30% than in market where growth is one or 2%," said Mr. Monro-Davies.

Fitch IBCA is expected to post a 40% revenue increase this year, to $150 million, while Duff & Phelps Credit Rating Co. expects revenues will top $80 million after $67 million last year.

Revenues at Moody's grew 26% in the second quarter this year, to $141 million. The first-quarter increase was 25%, to $132.5 million.

Neither S&P nor Thomson BankWatch disclose earnings.

The lion's share of rating revenues still comes from the U.S, but executives say the fastest growing portion of the business is now elsewhere.

And there is still much room for growth because the vast majority of banks are unrated. According to figures compiled by BankStat, also an affiliate of American Banker, and the Federal Deposit Insurance Corp. there are 17,636 banks worldwide-9,024 U.S. and 8,612 foreign banks.

As financial markets continue to globalize, executives predict demand for ratings-both on bank and corporate-will grow even more. Thomson BankWatch, for example, is considering rating banks in Albania, Bulgaria, Lebanon, and Nigeria, among other places.

Industry observers add that even if there is still little need for ratings on most foreign banks, the number of banks covered by the agencies could easily double over the next couple of years.

As that happens, U.S.-based credit raters will further internationalize, strengthening their already dominant positions.

"Financial markets are globalizing and rating agencies are globalizing along with them," said Cliff Greip, executive managing director of financial institutions ratings with S&P.

Even as these agencies see ever more opportunities in banking, Duff & Phelps is holding back.

"We just don't see any compelling revenues out there," said a spokesman for the company. He suggested both Moody's and S&P issue largely unpaid, unsolicited ratings, while Thomson BankWatch and Fitch IBCA make money mainly on their research.

Several bankers said that after years of generally relying on Moody's and S&P for domestic ratings and IBCA and Thomson BankWatch for foreign banks, they see little reason to change. They also noted that as banks clamp down on costs, they are simply not in a position to pay for more rating services, even if they wanted to.

"Bank budgets are shrinking and there's a Darwinian process going on," said Denise Gaudy, senior vice president and manager for international trade finance at BankAtlantic in Miami.

"We pick the rating agencies we think are best because cost is clearly a factor," she said.

Bankers also point out that credit ratings are only one of several criteria they employ when making their own internal assessments of other institutions.

"Rating agencies are good starting points, but you should never substitute their judgment for your own assessment," said Mr. Coltman.

Rating companies remain unfazed by bankers' reservations. Pressures to cut costs will increasingly encourage banks to use these and other outside evaluations, they predict.

"There is an almost insatiable appetite for information about banks," said Christopher T. Mahoney, managing director of banking and sovereign group ratings at Moody's. "The deeper we go, the more interest there is."

"Financial markets are globalizing and there are more banking problems worldwide, " said Gregory Root, president of Thomson BankWatch. "The number of ratings will continue to grow."

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