Centurion plans to offer stock options

The management of Centurion Bank is contemplating an employees stock option scheme (ESOP) which was likely to be offered after the present rights issue exercise was over.

The bank was also toying with the idea of developing trade-related and non-resident Indian (NRI) business synergies with BankMuscat in the Middle East "" its promoter bank and the largest bank in the Sultanate of Oman. Shailendra Bhandari, managing director, said, "We have plans of offering an Esop to our employees."

About the issue price and the timing of the scheme, Bhandari said, "The scheme needs to be passed by the shareholders either at an extra-ordinary general meeting (EGM) or at the next annual general meeting (AGM) of the bank. The price of the scheme and other details would be decided then."

He also said the quantum of funds to be raised through the scheme would not be much although it would add to the capital of the bank.

Bhandari however, said, "Bank's offering ESOPs generally offered the scrip's value on a cutoff date as the price of the scheme, although Centurion was yet to decided on the method of pricing."

Past history, however, also shows that few corporate entities have also offered the stock at a discount to their employees in the past.

Meanwhile, Centurion has entered into a memorandum of understanding with Bank Muscat "" the largest bank in Sultanate of Oman, for repeaing business synergies with it. Based on BankMuscat's plan to expand to other parts of the Middle East it is planning to leverage its relationship with BankMuscat to capture a significant share of the trade-related and NRI business between India and the Middle East.

The pact signed will also include pooling of resources by both banks for capturing this segment of NRI population in Oman, Bahrain, United Arab Emirates and other Gulf Co-operation Council (GCC) countries.

The bank also said in its draft prospectus, "We are in the process of evaluating new products such as mortgages and credit cards and propose to shortly launch wealth management services including announcing a bancassurance partner. We intend to use our existing geographic presence to further increase our low cost deposit base and retail assets portfolio."