Bankruptcies rose slightly in 2011

Focus shortTHE NUMBER of business bankruptcy petitions filed in Slovakia during 2011 increased moderately to 392. Compared with the previous year this represented an increase of 17 bankruptcies, or 4.53 percent.

Focus shortTHE NUMBER of business bankruptcy petitions filed in Slovakia during 2011 increased moderately to 392. Compared with the previous year this represented an increase of 17 bankruptcies, or 4.53 percent.

The Slovak Credit Bureau (SCB) ascribes the relatively low year-on-year increase in bankruptcies to economic conditions for doing business in 2011 having been comparable with 2010, it wrote in its analysis released on March 7.

“We registered the highest year-on-year increase in the number of bankruptcies in 2010, up 34.4 percent compared with 2009,” Jana Marková, chief analyst at SCB, told The Slovak Spectator. “We ascribe the high number of bankruptcies in 2010 especially to the effects of the economic crisis.”
SCB expects the number of bankruptcies to grow in 2012, but does not regard this as a particularly negative development.

We regard bankruptcy as a ‘curing’ process, enabling problematic companies to depart from the market,” said Marková.

Developments in the number and share of bankruptcies differed in individual sectors of the economy as well as between regions.

Four sectors of the Slovak economy, including supply of electricity, gas, steam and cold air, had no bankruptcies during 2010 and 2011. The highest numbers of bankruptcies were registered in retail and wholesale trade, car and motorcycle repair, industrial production and construction.

However, the SCB pointed out that a high number of bankruptcies in one sector or region does not automatically mean that this sector or region has a high bankruptcy risk. SCB said that the share of bankruptcies out of the total number of enterprises operating in a particular sector or region is a more accurate indicator from a longer-term point of view.

The ranking of regions according to their number of bankruptcies differed between 2010 and 2011, with the exception of Bratislava Region, which registered by far the highest number of bankruptcies in both years.

Nitra Region had the lowest number of bankruptcies in 2010 but that spot was taken by Trenčín Region in 2011.

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