The bankruptcy wave is still here

In real economy the crisis is far from being over and a large number of companies are still expected to grow bankrupt. With 20,000-30,000 bankruptcies a year, Hungary is still the ‘leader’ in Central and Eastern Europe. A good proportion of these bankruptcies could be prevented if the signs of potential partner companies’ hardships were detected in time – says Gábor Kárpáti, the managing director of Coface Hungary. According to András Bagyura, Coface Hungary’s commercial director the economic recession taught a number of company leaders to gather as much business information about potential partners as possible, thereby increasing their own chance for success or sometimes for survival. In fact, there is great need for this skill as the number of insolvent companies kept growing (at a slower pace though) in 2010 and went above 24,000 in nine months. Mr Bagyura also pointed out that as a parallel phenomenon, a high number of new companies were registered and it seems that from the bankrupt companies many reincarnated, especially in the critical sectors. He added that in the volatile economic environment it is not enough to gather business information: up-to-date and relevant information is needed about partners. Gábor Kárpáti emphasised the importance of prevention and in his view more company leaders know how to do it these days. He also warned that professional help is inevitable in order to properly analyse the information gathered.