Estonia, Latvia, Lithuania - Banking Market In The Baltics 2008 - CEE Banking BriefIntelace ResearchMarch 1, 2008 44 Pages - SKU: INTL1692956 |
| Countries covered: Estonia, Latvia, Lithuania Macroeconomic situation. The year 2007 was another successful period for all Baltic economies. Falling unemployment, advancing GDP and increasing wealth of individuals made the Baltics the most dynamically developing region in the whole Europe. Unfortunately first warning signs have been also visible in 2007 - Accelerating inflation, falling growth rate of GDP, huge C/A imbalances and interest rates on record highs, all factors threatening further economic growth. Banking markets. Baltic banking markets were flourishing in 2007. Explosive expansion of lending, including mortgage and very quick deposits growth contributed to jump in total banking assets by ~35% on average, placing Latvia, Lithuania and Estonia among the top 5 most rapidly growing banking markets in Central and Eastern Europe. Encouraged by growing volumes in 2007 Baltic banks kept investing in infrastructure and significantly expanding branch, ATM and POS networks. Competition. Baltic banking markets are highly concentrated if compared to other CEE markets. Top 5 international groups present in all 3 countries still control almost 75% of combined banking assets. On the other side lack of major administrative entry barriers makes Baltic markets still an interesting opportunity for new entrants including both M&A and “greenfield” approach. Perspectives. The recent macroeconomic tensions, overheated real estate markets and worsening worldwide economic climate are likely to reduce temporarily the rate of growth in all Baltic countries. Especially Latvia and Estonia may be affected by lower growth rates and possible currency devaluation. Nevertheless Baltic economies are relatively flexible and healthy, so after a temporary problems, they are likely to quickly resume growth. Intelace Research expect that banking assets in Baltic countries will further increase by 23% on average p.a. through 2009. |
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