German bankruptcies down 6.2% y/y in first half of year - Destatis

According to the report from Federal Statistical Office (Destatis), German local courts reported 9,006 business insolvencies in the first half of 2020. Destatis reports that this was a decline of 6.2% compared with the first half of 2019. Actually, the economic problems of many businesses owing to the coronavirus crisis have not been reflected yet by an increase in reported business insolvencies. A reason is that the obligation to file for insolvency has been suspended since 1 March 2020.

Most business insolvencies occurred in the commercial sector (including maintenance and repair of motor vehicles) in the first half of 2020, with 1,485 cases (first half of 2019: 1,653). Companies in the construction industry filed 1 462 insolvency applications (first half of 2019: 1 586). 1 004 (first half of 2019: 1 143) and 974 (first half of 2019: 1 032) insolvency applications were filed in the hospitality industry.

According to information provided by the local courts, the anticipated claims of creditors resulting from applied-for corporate insolvencies rose significantly to EUR 16.7 billion in the first half of 2020. In the first half of 2019, they stood at 10.2 billion euros. This increase in receivables, combined with a decrease in the number of business insolvencies, is due to the fact that more economically significant companies filed for bankruptcy in the first half of 2020 than in the same period in 2019.