Corporate insolvencies at record highs

ASIC/global-financial-crisis/investments-commission/chief-executive/

26 March 2012
| By Staff |
image
image
expand image

The number of companies entering liquidation is continuing to break records, with 10,544 companies entering some form of insolvency administration in the year to January 2012.

The Business Stress Report is collated by Dissolve - a business that provides advice to companies under financial distress. The report collates Australian Securities and Investments Commission data on company insolvencies for the past decade.

The number of companies going into insolvency administration in the year to January 2012 is up 21 per cent on the average of the past five years, and 10 per cent on the immediately prior year, according to the report.

There were 518 insolvency appointments in January 2012, making it the highest January on record.

The year to January 2012 also saw a record high 1,386 appointments by secured creditors (ie, banks appointing receivers), according to the report.

Insolvencies cost Australian banks $5.4 billion in bad debts for the December 2011 quarter, and $4.9 billion for the September 2011 quarter - up from an average pre-GFC (global financial crisis) level of $1.1 billion.

Dissolve chief executive Cliff Sanderson noted that banks in the UK have just written 5.1 billion pounds in the December quarter in corporate debt, which constituted a record quarter.

"While the Australian figure is all bank debt (personal and corporate) this shows Australian banks are still reporting huge levels of bad debt on an international scale," Sanderson said. 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 4 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 3 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND