Overview: Rising tendency in corporate insolvencies also in 2010, geographic and structural differences
During 2009 33,762 companies filed for bankruptcy in Germany.1 That means 11.08 percent more than during the previous year (30,394). This confirms the forecast by the Hamburg financial information agency Bürgel of approx. 34,000 corporate insolvencies during the last calendar year.
In 2009 the number of corporate insolvencies rose again for the second time running. All in all 340,921 companies became insolvent over the past ten years – see Chart 1.
Für 2010 prognostiziert Bürgel einen Anstieg auf 37.000 bis 40.000 Fälle.
For 2010 Bürgel forecasts a rise to between 37,000 and 40,000 cases. In a national comparison of the corporate insolvencies in 2009 the survey shows great differences in regional tendencies, company age and structure.
Insolvency statistics per federal state: North Rhine-Westphalia leads in the absolute, Bremen in the relative values
Based on the absolute figures, during the survey period from January to December 2009 the most corporate insolvencies occurred in North Rhine-Westphalia (7,178), followed by Bavaria (4,267), Baden-Württemberg (3,619) and Lower Saxony (3,423) – see Diagrams 2 and 3.
Regarded on a relative basis (absolute values of corporate insolvencies per federal state in comparison with the companies registered in each state, multiplied by 10,000) the insolvency rate results in a differentiated picture on a federal state level – see Charts 4 and 5.
According to this the most insolvent companies come from Bremen – 146 per 10,000 companies. In 2nd place follows Saxony-Anhalt (130 per 10,000 companies). Above the federal average of 91 corporate insolvencies per 10,000 companies is also Schleswig-Holstein with 120 bankruptcies, Lower Saxony (105), North Rhine-Westphalia (101), Saxony (100), Berlin (98) and Brandenburg (95). The lowest proportion of the relatively measured corporate insolvencies is in Hamburg with 58 cases per 10,000 companies, followed by Bavaria (72) and Baden-Württemberg (78). In addition, Thuringia and Rhineland-Palatinate rank below the federal average each with 88 insolvencies per 10,000 companies registered.
Cities: Berlin with the most corporate insolvencies, lowest values in Kiel
In the analysis of the Top 30 Cities (see Chart 6) Berlin registered the most corporate insolvencies during the year 2009 with 1,507 cases. This corresponds to a proportion of 4.46 percent of all corporate bankruptcies in 2009 in Germany. In second place is Hamburg with 992 corporate insolvencies (2.94 percent), followed by Munich (559 cases). The lowest number of bankruptcies was registered in Kiel (91 cases), Aachen (93 cases) and Karlsruhe (97 cases).
Changes per federal state: Berlin with the strongest decline
In comparison of the year 2009 with the previous year a differentiated picture emerges: according to the survey the number of insolvent companies through the Federal Republic rose by 11.08 percent. The bankruptcy trend increased most strongly in Bremen with a third more corporate insolvencies (plus 32.53 percent). Whereas in 2008 there were still 292 companies that had to give up, last year 387 corporate insolvency proceedings were instituted. Just behind Bremen in the ranking is Baden-Württemberg with an increase by 32.32 percent (2008: 2,735 cases; 2009: 3,619). Hesse also records high increases (plus 29.95 percent), Schleswig-Holstein (plus 23.89 percent) and Bavaria (plus 20.20 percent).
The greatest decline can be observed in the number of corporate insolvencies in Berlin with minus 11.35 percent. Whereas in 2008, 1,700 companies had to apply for creditor protection, the following year the figure was only 1,507. Also on the decline are the insolvency values in North Rhine-Westphalia with minus 6.44 percent (2008: 7,672 cases; 2009: 7,178) – see Chart 7.
Particularly younger companies hit by the crisis
It is not possible to automatically derive an insolvency risk from the corporate structure. However, it is noticeable that 16.55 percent of the companies that became insolvent over the past twelve months had been active in the market for no more than two years - see Chart 8. Altogether this involved 5,589 companies.
Just under 43 percent (14,440) of all companies that became insolvent during the surveyed period were not old than six years. But also companies that have existed on the market for between 11 and 20 years, are not immune from bankruptcy: 2009 just under a third of the insolvent companies fell under this category (28.32 percent; 9,563 cases). According to the survey the insolvency risk decreased again in the case of old-established companies that have already been on the market for 50 years or longer. With 3.22 percent their proportion of the insolvency statistics for 2009 is the lowest (1,086).
Trades go bankrupt most frequently
Most of the companies that were involved in bankruptcy proceedings from January to December 2009 are trades with a share of 41.42 percent (13,924 cases), followed by GmbHs (limited liability companies) (30.72 percent; 10,370 cases) and the legal forms GmbH & Co. KG or Gesellschaft bürgerlichen Rechts/GbR (private partnerships) (9.3 percent; 3,131 cases) – see Chart 9.
Main causes of the increase in corporate insolvencies and the outlook
The figure of 34,000 corporate insolvencies forecast for 2009 by Bürgel one year ago has actually been confirmed by a figure of 33,762 cases. The reasons for these insolvencies are complex. While the underlying economic factors dictate the trend, the business factors determine in particular the risk for small, medium-sized and young companies. There is still a lack of custom for many companies. Existing orders have been completed. Loans are granted restrictively. Indicators are the considerably increased insolvency figures and a continued high short-time rate.
The domestic demand and exports have meanwhile become stable at a low level. The job market is following the economic slump with a short time lapse. A boom in demand from the private consumer can also not be expected in 2010 due to the background of rising unemployment figures. “We are indeed observing a credit squeeze that together with deferred payments and shortfalls as well as the lack of equity capital is increasing the risk for companies of forfeiting their liquidity,” says Bürgel managing director Dr. N. Sellin. For 2010 Bürgel estimates 37,000 to 40,000 insolvency cases.