Amex hit by higher credit losses

American Express has seen defaults on payments rise

Credit card firm American Express has seen a fall in quarterly profits after credit losses rose more than forecast.

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

The firm saw profits fall to $653m (£326m) from $1,057m a year earlier sending shares in the firm 11% lower in after-hours trade.

Amex, 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.

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