Russia's top consumer lender won't touch mortgages

MOSCOW, Jan 20 (Reuters) Vodka-to-banking billionaire Roustam Tariko made a fortune by introducing Russians to consumer credit, helping millions to buy their first television, refrigerator or car.

But he won't pander to the latest aspiration of the emerging middle class a mortgage to buy a new home as long as Russians are gripped by what he calls a ''crazy'' property boom.

''I believe a crisis will come soon,'' said Tariko, founder of Russian Standard Bank, the country's top consumer lender.

''Real estate prices are very inflated.'' Tariko, a tanned 44-year-old with a shock of shoulder-length black hair, has turned a knack for marketing learned as a young tour operator and liquor salesman into a burgeoning financial and drinks empire.

His Russian Standard vodka is the country's leading premium brand, and he is taking on the North American market with Imperia, a top-of-the-range product that comes in a fancy bottle with Swarovski crystals decorating the cap.

He founded Russian Standard Bank in 1999, the year after financial markets crashed, and has never looked back. Forbes magazine last year estimated his fortune at 1.9 billion dollars.

Russian Standard Bank boasts a return on equity of over 75 percent, controls 80 per cent of Russia's credit card market and employs 40,000 people.

''One-third of Russians are our clients, we are getting 40,000 to 50,000 new customers a day,'' Tariko told Western journalists this week over dinner at Moscow's exclusive Turandot restaurant.

WARNING SIGNS Now, in a move to reduce the risk profile of his bank and cut its reliance on its 6 billion dollars in junk-rated bonds, Tariko wants to build up a deposit base by encouraging Russians to open savings accounts.

The bank, which has until now distributed its loan products at kiosks in electronics and home-improvement stores, built 150 branches last year and has plans for another 150 this year. ''If we reach 500 branches in two years it will be sufficient to serve our depositors,'' he said.

But despite his ambitious growth plans, Tariko sees risks to Russia's eight-year-old economic boom, above all from the red-hot property market.

Apartment prices in Moscow have doubled over the past year to over 4,000 dollars per square metre, say market researchers IRN.

Top city-centre properties can sell for 20,000 dollars per square metre.

But, Tariko says, too many speculators are buying. When he drives down Moscow's affluent Kutuzovsky Prospekt, he sees that nobody is home in many newly-built residential complexes.

''When I see the lights on in all these new buildings, I will start to invest (in mortgages),'' he said.

''But while the lights are out, I won't.'' ARGENTINA SCENARIO? Russia's currency, which like the property market has risen on the tide of petrodollars earned by the world's second-largest oil exporter, is another worry.

''Currency risk is important. A lot of people are saying that we could have an adjustment,'' Tariko said. ''The Russian currency is becoming more expensive every day.'' The rouble rose by 9 per cent against the US dollar in 2006, and its underlying appreciation has more than eroded the advantage won by Russian firms from the devaluation of 1998.

''We really need to optimise our costs, and Russians are not very strong on optimising costs,'' says Tariko.

He also drew a parallel with Argentina, which in 2002 devalued its currency and declared the largest sovereign default in modern history after its economy, unable to sustain a fixed currency peg to the dollar, slid into crisis. ''If you take scenarios like Argentina, it just became impossible that the currency was so expensive.'' OLIGARCH RISK As a self-made businessman, Tariko seems more relaxed about political risk than other Russian ''oligarchs'' who scooped up state assets at knock-down prices in the 1990s and still depend on the favour of the Kremlin.

Some have sold strategic stakes or floated their companies on the stock market to insure against the kind of Kremlin attack that landed oil billionaire Mikhail Khodorkovsky in jail and forced others into exile.

But Tariko, who owns Russian Standard Bank outright and has no need to raise fresh capital, has rejected the advice of investment bankers to float off a minority stake.

''Maybe I'm naive, but I believe that the best protection you have against the government is to do your best work,'' he says.

''The only nightmares I have in terms of my work is when my customer is unhappy. My best protection is my product.'' REUTERS SY KP1038