Hamburg, Frankfort The credit insurer Allianz Trade expects more bankruptcies in the current year as a result of the recent bank turbulence. For Germany, Allianz Trade expects an increase of a good fifth (22 percent) compared to the previous year to around 17,800 cases in the current year.
“Due to the now even more restrictive bank lending, more companies are likely to get into difficulties than expected at the beginning of the year,” Allianz Trade explained on Tuesday. So far, the credit insurer had predicted an increase in corporate insolvencies in Germany by 15 percent.
“It’s still not a wave of bankruptcies, even if a double-digit increase initially gives the impression,” said Milo Bogaerts, CEO of Allianz Trade in Germany, Austria and Switzerland. From his point of view, the problems of banks in the USA and Switzerland are also leaving their mark in Germany: “With the sharp rise in interest rates, companies that are rather poorly financed run the risk of getting into trouble.”
The rapid rise in interest rates brought down several regional banks in the USA in mid-March. Share prices of banks around the world came under pressure. The major Swiss bank Credit Suisse, which was already in crisis, was rescued by an emergency sale to UBS in mid-March. However, central banks, politicians and bank representatives emphasized the resilience of the banking system in Germany and Europe.
Based on a recent survey, the Munich Ifo Institute came to the conclusion that companies in Germany are finding it easier to get credit again. In December, 30 percent of companies still reported that banks were reluctant to grant loans, but in March it was only 22.7 percent. “The turbulence at some international banks has had no effect on lending in Germany,” concluded the head of the Ifo surveys, Klaus Wohlrabe.
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According to official data, the number of company bankruptcies in Germany rose last year for the first time since the global financial crisis of 2009. Extremely high energy prices, record inflation and consumers’ reluctance to buy again forced more entrepreneurs to give up their businesses. Nevertheless, the numbers remained very low in a long-term comparison.
“Even by the end of 2023, Germany is unlikely to have reached the level before the pandemic,” predicted Bogaerts. “This is only likely to be slightly exceeded again after a further increase in insolvencies of six percent in 2024.”
According to Allianz Trade estimates, global insolvency figures will also rise by a good fifth (21 percent) in the current year from the comparatively low level recently. Here, too, the credit insurer expects that the level of the pre-Corona year 2019 will not be nearly reached again until 2024.
“Germany is still in a good position compared to other European countries,” said Bogaerts. “However, the dynamics of the increase in bankruptcies in the course of normalization have meanwhile adjusted to global events.” This is not a reason for panic, but a reason for caution, says Bogaerts.
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