3QFY17 profit well above forecast at Bt1.7bn, up 1.9% y‐y and 45.4% q‐q: KKP reported strong earnings beat for 3QFY17 on smaller‐than‐expected loan‐loss provisions. In this period, the quarterly profit clocked in at Bt1.7bn, up 1.9% y‐y and 45.4% q‐q due chiefly to a precipitous drop in loan‐loss provisions. KKP set aside loan‐loss provisions of only Bt75mn in this period, down from as high as Bt1bn in the same year‐ago period and Bt455mn in the prior quarter.

3QFY17 loans up marginally while NPLs down: In 3QFY17, KKP reported its loan book grew a marginal 0.2% q‐q, taking its YTD loan growth to 3.5% from end‐FY16. Its asset quality improved as reflected by a decrease in NPL ratio to 5.6% in this period from 5.8% in the previous quarter. Declining NPLs also allowed KKP to lower its loan‐loss provisions. Despite a dramatic drop in loan‐loss provisions, its NPL coverage ratio, however, continued to climb upwards to 105% in this period.

FY17‐FY18 profit estimates unchanged, ‘ACCUMULATE’ rating intact with Bt77/share target price: For the meantime, we keep our FY17‐FY18 profit forecasts for KKP unchanged at Bt5.7bn and Bt6.4bn respectively. There may be scope for us to place our profit estimates for KKP under review for possible upgrades after we get an update on its loan‐loss provision guidance at today’s post‐results analyst meeting. We also leave our ‘ACCUMULATE’ rating intact for KKP with a FY18 target price of Bt77/share.