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AmEx to cut US$1b in costs by end of 2017
[LONDON] Credit card issuer American Express Co said it would cut US$1 billion in costs by the end of 2017 as it responds to intensifying competition in the payments industry.
AmEx's shares fell 4.1 per cent to US$60.05 in extended trading on Thursday, after the company reported its fourth straight decline in total revenue, net of interest expense.
Net income attributable to common shareholders fell to $873 million, or 89 cents per share, for the quarter ended Dec 31, from US$1.44 billion, or US$1.39 per share, a year earlier.
The latest quarter included a US$335 million after-tax impairment charge and the year-earlier period a US$453 million after-tax gain.
Total revenue, net of interest expense, fell 7.6 per cent to US$8.39 billion. Adjusted revenue rose 4 per cent.
AmEx, which also operates payment networks, lost a few lucrative clients such as Fidelity Investments, retailer Costco Wholesale Corp and JetBlue Airways Corp last year. "Our 2015 results and outlook reflect the reset in co-brand economics, pressures on merchant fees, the evolving regulatory environment and intense competition that have been re-shaping the payments industry," AmEx's Chief Executive Kenneth Chenault said in a statement.
AmEx said it expects to earn US$5.40-US$5.70 per share in 2016. The company earned $5.05 per share in 2015.
Shares of the company, which had fallen about 10 per cent this year to Thursday close, had lost a quarter of their value in 2015.