“There are signals that light up, but no catastrophism. For the moment, the activity is still very high, the order books are well filled. The recession, if there is a recession, will rather be felt at the beginning of 2023”, summarizes Denis Le Bossé, president of the firm ARC, expert in debt collection. If the coming months promise to be difficult, due to the energy crisis and a sharp economic slowdown – industrial production fell by 1.6% in July, indicates INSEE on Friday September 9 –, companies French companies enter the period in a rather favorable financial situation.
Margins remain high and cash flow well fueled by the dynamics of the first six months of the year. According to a note from Allianz Trade, if they start to dwindle, the cash reserves of companies “stay high” : “They exceeded 2019 levels by 30% in Europe », Estimates the credit insurer. “Companies say that orders are holding up, that the French still want to consume, that companies still want to invest”assured François Villeroy de Galhau, Governor of the Banque de France, Friday morning.
In this context, the reimbursement of the 148 billion euros in loans guaranteed by the State (PGE) granted during the crisis to some 700,000 companies is being done without major problems, especially since less than half of the beneficiaries have not not spend funds they had requested as a precaution. “Around 56% of PGEs were repayable in 2022 – 288,000 loans as of the second quarter, and 58,000 as of the third,” specifies Frédéric Visnovsky, credit mediator at the Banque de France.
Bankruptcies remain contained
At the end of August, the mediator had received only some 420 requests for renegotiation of credit, an extremely low figure given the number of loans distributed, which is perhaps explained by the fact that the companies which request a debt restructuring see their ratings downgraded and risk having difficulty obtaining subsequent financing. The institution has reassessed the risk of loss on the loans granted to 4.6% (compared to around 3% at the start of the year), given the problems linked to the conflict in Ukraine.
Bankruptcies also remain contained, given the violence of the crisis due to Covid. ” Certainly, the opening of insolvency proceedings increased by 74% between 2021 and 2022notes Frédéric Abitbol, president of the National Council of Judicial Administrators and Judicial Agents. But we will end the year with 38,000 or 40,000 procedures, around 30% less than in a normal year”.
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