THE number of Scottish corporate insolvencies in the year to March 31 was down by 8.2 per cent on the prior 12 months, at a seven-year low, figures from the Accountant in Bankruptcy have shown.

The Accountant in Bankruptcy (AiB) received notices of 849 Scottish-registered companies becoming insolvent or entering receivership in the 2014/15 financial year to March. The annual total has now declined in three consecutive years.

The AiB noted it had received 197 notices of Scottish company liquidations or receiverships in the opening three months of 2015. This was up by 2.1 per cent from the previous quarter but down by 19.3 per cent on the period from January to March 2014.

Comparing the number of insolvencies with the same period a year earlier strips out the impact of seasonal fluctuations. The AiB figures to not include corporate administrations.

The latest statistics from the AiB also show the number of personal insolvencies in Scotland in the three months to March 2015, at 2,569, was the lowest quarterly figure for 10 years.

Paul Dounis, insolvency partner at accountancy firm Baker Tilly in Scotland, said: "With personal insolvencies down to their lowest level in 10 years and the numbers of Scottish companies becoming insolvent or entering receivership at the lowest level in seven years, these latest stats from the AiB paint a rosy picture of financial health in Scotland. However, the numbers don't tell the whole story. Many companies are still experiencing financial distress and there are a number of factors which could result in these numbers rising within the next one to two years."

He added: "There has been a trend for the banks to sell off their non-core bad debt books to private equity groups. As these groups work through those loan books, they are prioritising those that they can realise assets from first. However, as they start to focus on the more distressed companies in the portfolios, they may be left with little choice but to enter them into some kind of insolvency procedure.

Mr Dounis observed that a significant number of companies were servicing their debts on an interest-only basis.

He said: "By doing this many of them are avoiding entering into insolvency procedures, but also not paying off any capital. This could leave many companies vulnerable as and when interest rates rise and inflationary pressures begin to emerge."

UK base rates have been at a record low of 0.5 per cent since March 2009.

Scottish Business Minister Fergus Ewing welcomed the AiB corporate insolvency statistics.

He said: "We are now looking at levels of sequestrations and companies going to the wall that haven't been seen since before the global recession."

Bryan Jackson, business restructuring partner with accountancy firm BDO, said: "We have already seen the impact that the falling oil price has had on businesses in the north-east of Scotland, and this is likely to continue as the [oil] sector tries to manage its finances in a period of considerably lower revenues. The impact of this will also be felt by many of the other businesses, such as hospitality and business support services [firms], which rely on the high income of the oil industry for their business."

He added: "In general, business owners need to prepare themselves for the coming year by ensuring that, as the economy improves, they have managed their finances appropriately to avoid accumulating unnecessary debt to ensure that they can cope with any unexpected issues which may arise."