A growing number of local companies with turnovers over EUR 1 million have been filing for insolvency, although the total number of insolvency cases has been decreasing. The average incidence of insolvency is four times higher in Romania than in the region, according to the agency KeysFin.

Over 4,700 companies entered insolvency in the first six months of the year, down 55.98% compared to 2014, according to Romania’s Trade Registry. The highest number of insolvencies was recorded in Bucharest, amounting to almost 1,100. The number, however, went down by 50.7% in this period compared to the first six months of 2014.

“Statistics seem promising at first glance, but they are hiding an alarming phenomenon,” according to KeysFin, reports local Mediafax.

Insolvencies among companies with turnovers below EUR 100,000 went down, but insolvencies among companies with turnovers over EUR 1 million increased by 13% year-on-year, and these have a higher impact in the economy.

A higher number of SMEs went into insolvency between 2010 and 2014 because of cash-flow problems while larger companies have managed to agree with banks on loan restructuring. Starting last year, however, local banks have been eliminating non-performing loans from their portfolios, which affected larger companies that have had problems in paying back their loans.

editor@romania-insider.com