Bankruptcies continue to increase

Many small companies have gone under because of the sluggish economy Keystone

Bankruptcies in Switzerland have reached their highest level since 1996, with over 10,500 businesses unable to meet financial commitments last year.

The 7.4 per cent increase in new bankruptcies in 2004 confirmed an ongoing trend that specialists blame on a sluggish economy.

Last year was the first time bankruptcies passed the 10,000 mark since 1996, which was a record year.

Bankruptcies have been on the rise for the past four years, but the latest increase was especially strong, according to Andrea Grossi of the Federal Statistics Office.

“Swiss companies are usually small and employ only a few people, making them particularly vulnerable in times of economic hardship,” he added.

Most cantons recorded an increase of new bankruptcies. Zurich, Basel-Country, Neuchâtel, Geneva and Vaud were hardest hit, while life was better for businesses in Lucerne and St Gallen.

Billion-franc losses

The authorities also completed 10,280 bankruptcy procedures last year, the most ever recorded. The increase was nearly 10 per cent over 2003.

Creditors were left facing losses worth SFr4.7 billion (SFr3.87 billion), up by almost a third. There was one single case in canton Vaud worth over SFr500 million.

Creditors had to work harder to recover their funds in 2004. The number of formal notices to pay rose 2.6 per cent.

Bailiffs also intervened more often (+7.6 per cent), and the number of forced auctions increased by 6.7 per cent.

Grossi says the outlook is not much better for this year. He expects the number of bankruptcy procedures to continue increasing, but adds that they should not rise as much.

The statistics office figures confirm others issued by the Swiss business information agency, Creditreform, earlier this year.

According to this agency, taking mergers, company closures and liquidations into account, more than 25,000 companies ceased to exist in 2004.

swissinfo with agencies

Key facts

10,524 bankruptcies were declared in 2004.
This represented an increase of 7.4 per cent.
10,208 cases were wrapped up last year.
Creditors lost SFr4.7 billion, a 32.2 per cent increase.