BANKING and financial conglomerate Guoco Group shares dipped yesterday after the company posted a full-year result that held few surprises for the market. The group on Tuesday reported 12.5 per cent higher profits at $1.63 for the June year. Subsidiary Dao Heng Bank Group posted a profit of $1.2 billion, up six per cent on the previous year, and First Capital Corp, the Singapore-listed arm, contributed S$117 million (about HK$630 million), a rise of 30 per cent. 'Basically, I thought Guoco was pretty much in line with what they [the market] were expecting,' said Carmel Wellso of Baring Securities. 'We were looking for a higher operating profit and lower associated contributions, so they basically cancelled each other out.' First Capital's result had indicated what to expect from the group and Dao Heng's attributable profit also was in line with forecasts, she said. James Capel's Philip Niem said he overestimated the contribution from exceptionals 'a touch'. The group's arm in the Philippines, Guoco Holdings (Philippines), formed a joint venture in the period and took a major interest in PICOP Resources, which underpinned a 61 per cent growth in Guoco Holdings (Philippines). According to the August edition of the Estimate Directory, the consensus forecast for the Guoco Group was for attributable profits of $1.49 billion for the past year, and earnings of $1.71 billion in the current year. Mr Niem said he was now forecasting a result of $1.83 billion, down $24 million on his previous forecast, and a 1997 result of $1.94 billion. Neil Mackay of HG Asia said he expected exceptional profits slightly higher because of the sale of warrants in First Capital. He said further exceptional profits were due in the current year for Guoco. OCBC Securities Hong Kong analyst Martin Ching said the Dao Heng result of $1.2 billion was expected, although net interest income growth of 14.4 per cent was slower than the brokerage's forecast of 17.3 per cent. He said Singapore operations had contributed more than he expected, while the exceptionals of $230.49 million appeared to consist of income from disposal of interests in associated companies. Mr Ching said the 61 per cent growth in Guoco Holdings (Philippines) had surprised him with its strength. But he said no divisions in the group really stood out for their performance over the year. He recommended Dao Heng as a long-term buy. He said Dao Heng continued to reap the benefits of acquiring Overseas Trust Bank. Its operating costs rose only 2.8 per cent, improving its cost-to-income ratio to 39.3 per cent.