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. Last Updated: 07/27/2016

Tariko Says Worst of Credit Squeeze Over

Billionaire Rustam Tariko, whose Russky Standart bank stopped its cash and mortgage lending last month, said the global credit squeeze was "calming down" and could ease in the coming months.

"I believe the market will slow down for a while, maybe for the next two to three months," Tariko said in an interview Tuesday. "Then, depending on the situation and the action of the Russian government, it will accelerate again."

President Vladimir Putin said Sept. 21 that the government would support the liquidity of the country's banks to ensure economic growth amid the rise in global borrowing costs caused by the collapse of the U.S. subprime mortgage market.

Tariko said about 60 percent to 70 percent of his bank's funding came from overseas and 10 percent came from deposits.

While the interest that banks' change on loans to each other would increase by 200 basis points to 400 basis points in the short-term due to the credit crunch, the rise would be offset by an influx of new customers as other banks are unable to give credit, he said.

"The cost of money will increase, so automatically we will lose a part of our margin, but it will be highly compensated by growing demand," he said.

Tariko called the mothballed cash loan and mortgage businesses "experimental," and a "microscopic" part of Russky Standart's business. The information had been broadly reported "just to create a scandal," he said.

While the loans may be resumed, he said the bank would concentrate on issuing credit cards and so-called point of sale consumer loans in, which is its main business. Russky Standart controls 70 percent of the credit card market, according to Tariko.

Company spokesman Artyom Lebedev said last month that the bank's market share of point of sale loans is 40 percent.

Russky Standart will concentrate on "more qualitative clients rather than giving loans to everybody" in response to the increased cost of money as well as "governmental suggestions" that banks in Russia apply a more selective lending policy, Tariko said.