Business News
American Express profits sink 22 per cent
Oct 22, 2009, 21:14 GMT
New York - The giant credit firm American Express Thursday said its profits had fallen 22 per cent in the third quarter to 632 million dollars compared to the same period last year.
But cost-cutting moves and the first signs of economic recovery slowed down the company's plummeting returns.
Analysts had anticipated a worse performance. American Express estimates another 1.2 billion dollars in abandoned credit obligations, a figure that improved since last year, when it was 13 per cent higher.
Through the high US unemployment rate - which rose to 9.8 per cent in September - many card holders can no longer pay their monthly credit bills.
Unlike rivals Visa and Mastercard, Amex must swallow the losses on its own. With Visa and Mastercard, the risk lies with member banks, firms and organizations which issue the cards.
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