Cost-cuts save day but Amex still dives

American Express fourth-quarter earnings crashed 72%, only beating analysts' forecasts because of aggressive cost-cutting.

Net profit fell to $172 million (£124.8 million) from $831 million a year earlier. Revenue dropped 11%. The firm blamed the recession, higher loan losses, lower customer spending and a stronger US dollar.

Chief executive Kenneth Chenault said: "This is one of the most difficult operating environments we have seen in decades. The housing market has continued to deteriorate, unemployment has risen, and retailers have seen some of the biggest declines in many years."

Chief financial officer Dan Henry said: "Card-member spending is likely to remain very soft, and we continue to expect past-due loans and write-offs to rise."

Amex became a bank holding company in November to get access to $3.39 billion in taxpayer money under the US Treasury's Troubled Assets Relief Programme.