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This article focuses on the merger and consolidation trends in the Baltic banking industry as of May 1998. The past 12 months have seen some dramatic consolidation in the financial systems of the three Baltic States. This has included some of the biggest and best known names in regional banking, and involved cross-border mergers and even hostile takeovers. One of the most important is the expected merger between Hoiupank, the Estonian savings bank, and Hansabank, the country's largest financial institution. The Bank of Lithuania has allowed a merger between the State Commercial Bank, and the savings bank, Taupomasis. However, it remains to be seen whether any of the state banks can survive in their current form.