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Strong AUM growth and very healthy traction in deposits

Decline in liquidity buffer would lead to a reduction in negative carry

* BAF acquired 2.6m new customers (v/s 2.7m acquired in the previous quarter). New customer acquisition run-rate was healthy in 2QFY23.Total customer franchise stood at 62.9m (up 19% YoY).

* New loans booked rose ~7% YoY to 6.8m in 2QFY23 (v/s 6.3m in 2QFY22).

* Reported AUM stood at INR2.18t, up ~31% YoY and 7% QoQ. AUM in 2QFY23 grew by ~INR14.35b. AUM growth suggested that disbursements were strong across product segments.

* CRAR declined ~110bp QoQ to 25.1% (suggesting utilization of capital, led by strong growth).

* Deposit book stood at INR394b, up 37% YoY and 16% QoQ. Robust deposit growth suggested that BAF prioritized deposit growth in 2QFY23.

* Consolidated liquidity surplus stood at INR93b (v/s INR115.5b in 1QFY23). This decline in excess liquidity below INR100b has happened for the first time post-COVID. Surplus liquidity declined to 4.3% of core AUM (v/s 5.7% of core AUM in 1QFY23). The decline in liquidity buffer should lead to reduction in negative carry for the company.

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