Praise for banks as fewer firms go bust

THERE were 10 per cent fewer receiverships and administrations in 1992 than in 1991 and this early indicator of recovery 'appears to be continuing', according to a study by the accountants Touche Ross published yesterday.

Roughly 110 businesses were going bust every week in 1991 compared with 100 in 1992, and Touche said that if the figures for the past six months were extrapolated then the failure rate would drop to 94 a week in 1993.

Chris Morris, senior corporate recovery partner at Touche Ross, said much of this improvement was due to banks, particularly the big four clearers, giving far more support to their corporate clients than in previous recessions.

Business failures fell slightly in property and manufacturing, but were up in retailing and wholesaling, confirming 1992 as a bleak year for consumer spending.

The rate of company collapses fell by 18 per cent in London and the South-east, where the recession began, while it increased in Scotland by 27 per cent , illustrating the 'ripple effect' of the slump, Mr Morris said.

According to Touche there were 385 receiverships and administrations in December, down from 449 in the previous month and compared with 429 in December 1991. The firm said that last month's figures were distorted by the failure of Rosehaugh, the property group, which had 54 separate subsidiaries. Excluding this distortion, 'December 1992 is seen as perhaps the lowest month for appointments for well over two years', Mr Morris said.

Touche stressed the support banks are giving to companies compared with previous recessions in the 1970s and 1980s. As for 1993, Mr Morris said: 'I hope, and believe, that the banks will generally act sympathetically to their customers and continue to support them back into prosperity. After all, there is little point in sharing the pain if they are not also able to share the gain.'