Laxmi Bank Offers Stock Option

The recently held AGM of Laxmi Bank Ltd. has approved a proposal of the Board to offer stock option to the employees of the bank when the company issues more shares to raise capital further. If the proposal is approved by the relevant authorities of the government, this will be the first instance of such shares in Nepali corporate history.

The bank plans to set aside shares equivalent to one percent of the existing number of shares for the purpose of employees’ stock option, states a press release from the company. The bank’s employees were provided shares also when it had made the IPO.

The bank is issuing right shares this year at the ratio of 4:1 in a process to raise the paid up capital to Rs. 2 billion by the year 2010. According to the company, after the proposed right issue and employees’ stock option, the paid up capital of the company will reach Rs. 932.32 million.

The bank recorded 85.31 percent increase in its net profit in the fiscal year ended on mid-July 2007. In the six months ended mid-January 2008, the bank made an operating profit of Rs. 98.03 million and a net profit of 60 million recording a 146 percent rise over the net profit of the same period in the previous year. The annual target for the fiscal year ending on mid-July 2008 is to earn an operating profit of Rs. 240 million, states the press release