Sour credit card loans hurt Amex

The US credit card firm said net income was $831m (£418.7m), down from $922m a year earlier.

It attributed the decline to an after tax charge of $274m to boost revenue for credit card-related losses.

Analysts said the report is further evidence of the financial pressures on cash-strapped consumers in the US.

Earnings at the firm's credit card operations in the US were worst hit during the period, down to $7m from $473m a year earlier.

This reflected huge defaults by American Express customers suffering from higher mortgage repayments and higher energy and food bills, analysts said.

Slower earnings growth?

The losses have worried some observers who had thought that as American Express consumers were typically wealthier than other card holders, the firm might not be as badly hit by weakness in the consumer credit market as rivals.

"We are not immune from further deterioration in the economic and credit environment," said American Express chief executive Kenneth Chenault.

"But we believe our focus on the premium sector should help us to weather the current conditions better than many competitors."

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