Accession to the European Union has fuelled a boom in the Baltics and the leading banks are slugging it out to shore up their market positions. The domestic banks are well established but the competition from foreign-backed rivals is driving down margins close to zero in some products. The weapons in this battle are local knowledge versus the foreigners’ deep pockets and the outcome is still unclear, but Baltic consumers and businesses are already the real winners.
Despite their proximity and tiny size – the collective population of the Baltic republics is slightly less than that of London – the three countries are remarkably different, which has stymied the obvious advantages of rapid regional integration.
