3QFY17 profit hits record, in line with forecast: BAY made a record profit of Bt6.1bn in 3QFY17 in line with our forecast. The quarterly profit rose 9.7% y‐y and 4.1% q‐q on burgeoning interest income along with loan growth and higher non‐interest income.

3QFY17 loans up 1.5% q‐q, NPLs up slightly: In this period, BAY reported its loan book grew a further 1.5% q‐q, taking its YTD loan growth to 3.7% from end‐FY16. Retail and SME loans were key drivers of loan growth in this period while corporate loans were in contraction territory. Gross NPLs edged slightly higher to Bt36.8bn from Bt36.5bn in the previous quarter but growing loan book helped pull its gross NPL ratio lower to a mere 2.16% from 2.24% in the prior quarter.

FY17 profit upgrade, ‘ACCUMULATE’ rating unchanged with upwardly revised FY18 target price of Bt43/share: A bigger‐than‐expected drop in interest expenses prompts us to raise our FY17 profit outlook for BAY to Bt23.5bn from Bt22.2bn. We also nudge our FY18 target price for BAY higher to Bt43/share from Bt42/share following the above profit upgrade but our ‘ACCUMULATE’ rating remains unchanged as the new target still offers some but limited upside from current trading levels.