New directive comes at a time when industry is experiencing challenges related to interest capping law
By Fred Obura | August 22nd 2017
NAIROBI, KENYA: Family bank has suspended afternoon tea in a cost cutting measure.
In a memo from the bank's procurement and logistics department, the tea suspension took effect on Tuesday August 22.
"Beginning Tuesday, there will be no sponsored afternoon tea and only morning tea will be served," reads the notice.
In justifying the rationing, the bank said the move was thought of after a lot of debate and will help the institution save money at a time when the banking industry is experiencing challenges related to new interest capping law introduced last year.
At least three major banks including Equity, HF Group and Cooperative bank have reported a reduction in their 2017 half-year net profits attributing the fall to the new interest rate cap.
The memo which was released on Monday left many people wondering what kind of savings a bank would make from just suspending the afternoon tea.
"I don’t know how much they will save from the directives even though they have indicated that a lot of thought was put into consideration."
However some agreed that the bank is likely to make huge savings especially if the tea supply was contracted to a third party.
Moses Michira, a senior business reporter argued, "You got to think of it as such. You contract a third party to serve the tea at a fixed price whether it would be taken or not; whether there is a crisis in sugar or milk supply or not. For a staff of 100, this could easily get to Sh300,000 a month or Sh3.6 million a year- now escalate that to all your branches. We are only assuming a cup is at modest price of Sh30, Sh50 or more. It is actually a lot more realistic in today's market prices."
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