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. Last Updated: 07/27/2016

Tariko's Bank Halts Some Loans

Russky Standart bank has temporarily halted issuing cash loans as a result of the global credit crunch, the Financial Times reported Saturday.

Bank chief executive Dmitry Levin said the stoppage would last to the end of this month, the report said. The bank is also tightening requirements for credit cards and point-of-sale loans.

"Because of the growth in the cost of borrowing, we have to concentrate on key areas," Levin said.

His remarks followed a report by RBK Daily on Friday that Russky Standart had slapped a moratorium on some lending.

The bank, owned by vodka-to-banking billionaire Rustam Tariko, has grabbed 70 percent of the country's credit card market. But it is heavily reliant on wholesale foreign funding to underpin its aggressive business model.

Global money markets all but dried up in August when defaults on U.S. mortgages triggered a scare about the extent to which this and other high-risk debt had been repackaged and sold on to financial institutions around the world.

Levin said in a Sept. 10 interview that Russky Standart would have no problem redeeming a $300 million eurobond on Sept. 28, but would suspend issuance of senior bonds into 2008 until markets loosen up.

He conceded that Russky Standart might take a hit to credit growth but called the bank's funding situation "comfortable." Retail deposits were growing, and auto loan and credit card securitization deals were planned.

Over the longer run, the bank wants to get its foreign liabilities down to 15 percent to 20 percent of its balance sheet from 55 percent now.

Levin said that Russky Standart had not turned for funding to the Central Bank, which in August made available up to $12 billion in overnight funding to keep the banking system liquid.

But he did welcome a suggestion by Central Bank deputy head Konstantin Korishchenko that banks be allowed to pledge their credit portfolios as collateral in refinancing operations.