Purpose ‐ The purpose of this paper is to show how the inward-outward dynamics in the internationalisation of Baltic banks have led towards higher incorporation into Nordic banking groups and subsequently towards diminishing autonomy. Design/methodology/approach ‐ The paper presents two case studies, which characterise the evolution of international inward-outward connections in two major Baltic banking groups ‐ Hansabank Group and Skandinaviska Enskilda Banken (SEB) Group. Findings ‐ Acquisitions by Swedish banks in 1998 had a different impact on the internationalisation of the two leading Baltic banking groups. Inward-outward connections in the case of the Hansabank Group meant that they obtained strong autonomy in controlling Swedbank's activities in the Baltic. In the case of Eesti Ühispank, Latvijas Unibanka and Vilniaus Bankas inward-outward linkages meant that they lost autonomy about the further expansion to other Baltic countries and were eventually transformed into Baltic subsidiaries of SEB. These differences in strategies between Swedish banks could be explained by the background of the companies (especially their previous internationalisation experience). However, latest developments point towards growing similarities between two groups via incorporation of Hansabank into Swedbank group. Research limitations/implications ‐ The case study has inherently limited the capacity to offer generalisations concerning other service companies. Practical implications ‐ These results indicate the inward-outward development pattern of international service companies. The managers of similar companies can use this development pattern to project the dynamics of market entry strategies. Originality/value ‐ The paper introduces original experience allocation framework in the context of inward-outward internationalisation and outlines the dynamic nature of the strategic relations between the foreign owner and its subsidiary.