Rising interest rates put corporations in a tight spot

The interest rates, which have been rising rapidly since the middle of last year, are driving Germany’s companies to flee their liabilities. Only six of the 32 Dax companies that do not grant loans themselves increased their outstanding receivables in 2022. This was the result of balance sheet analyzes by the Handelsblatt.

The rest sought refunds. As a result, almost half of the companies cut their net investments compared to the previous year. Only a third recorded significant growth.

“The financing of investments for companies has become more complicated because banks are demanding a higher equity ratio for loans than in previous years,” reports Daniel Schmitz, NRW boss of the Swiss private bank Pictet. “As a result, companies are currently less willing to make riskier investments outside of the company.”