Amex credit losses rise, profits fall

Source: Exec Digital USA

Date :7/23/2008 4:28:34 AM

American Express, the biggest US credit-card company has seen a significant fall in quarterly profits after credit losses rose more than forecast.

Profits for the period declined 38 percent and the company warned that earnings per share would slow in the months ahead.

American Express, which targets wealthier individuals, has seen defaults rise in the wake of the US mortgage crisis.

“While we have been able to generate substantial earnings and returns relative to many in the financial sector, we do not expect to meet or exceed our long-term financial targets until we see improvements in the economy,” said Kenneth Chenault, the firm's chief executive.

Some believe the weak results may be a sign American Express relaxed its standards in pursuit of growth.

The firm wrote off 5.3 percent in loans for the second quarter, up from 4.3 percent.