Competition in the banking sector is different from the competition in the other sectors. Banks can compete only onthe basis of banking products. Also, banks are dependent on each other – actions of every market participant may strongly affectthe others. Problems of one bank may encourage distrust of the entire banking system. Analysis of Lithuanian banking sectorhas showed that country’s banking sector can be divided into three groups – the biggest banks, smaller and medium-sized banksand foreign banks branches. The largest part of banking sector is concentrated in activity of the three banks. All these banksare owned by Scandinavian capital. Lithuanian banking sector is highly concentrated. In 2005–2012 years the average mean ofthree banks concentration index (CR3) in deposits, assets and loans markets was 68 percent. According to these high values ofconcentration rates, Lithuanian banking sector can be characterized as oligopoly.

Article in: English

Article published: 2014-02-20