JOHANNESBURG, April 30 – Credit rating agency Moody’s has relinquished the regulatory licence of its South African subsidiary as part of a strategic shift toward serving cross-border investors and African issuers seeking international funding.
According to a notice issued by the Financial Sector Conduct Authority, Moody’s local unit formally requested to withdraw its registration as a credit rating agency. In response, the Prudential Authority sought additional time for banks to continue using ratings issued by the subsidiary.
Regulators have approved a 24-month extension period, allowing financial institutions to adapt before Moody’s local ratings are fully phased out for regulatory purposes. The Prudential Authority has also indicated its intention to eventually remove Moody’s South African unit from the list of eligible external credit assessment institutions.
South African banks rely on ratings from recognized agencies like Moody’s to determine minimum regulatory capital and reserves for credit risk. The transition has therefore prompted regulatory adjustments to ensure continuity.
The move reflects changes to Moody’s business model, with the agency opting to rate South African entities from its global network rather than through a locally licensed unit. Despite the change, the firm said its approach to assessing South Africa’s sovereign creditworthiness will remain unaffected.
Moody’s said it will maintain a relationship management presence in Johannesburg to support clients, aligning with its operating model in other regions such as Asia and Latin America.
The agency also reiterated its long-term commitment to Africa, pointing to its acquisition of Global Credit Rating Company as evidence of its strategy to support capital raising in domestic debt markets across the continent.
Overall, the shift underscores a broader trend among global financial institutions to streamline local operations while maintaining regional influence through cross-border services.
