FINANCIAL

AMERICAN EXPRESS, CITIGROUP ANNOUNCE CARD LINK

American Express, the fourth-biggest credit card company, said it agreed with Citigroup to start issuing credit cards in America that will be accepted by merchants in the American Express network. Citigroup, the world’s biggest bank, next year will start issuing credit cards with American Express’s rectangular blue logo and handle all billing, account management and customer relations, American Express said in a statement yesterday. Citigroup is the biggest credit-card company in terms of balances outstanding. Both companies are based in New York.

The alliance is the second relationship between American Express and a bank following a Supreme Court decision in October that opened the way for banks to issue American Express cards. American Express and Wilmington, Del.-based MBNA Corporation began issuing jointly branded cards last month.

Two months ago, the Supreme Court let stand a lower court ruling that Visa and MasterCard violated antitrust laws by barring their 34,000 member banks and affiliates from issuing American Express and Morgan Stanley’s Discover cards.

– Bloomberg News

REGULATORY

FRANKLIN TO PAY $20 MILLION TO SETTLE SEC BROKER CLAIMS

Franklin Resources, the biggest publicly traded American mutual fund company by stock market value, agreed to pay $20 million to settle allegations that the firm failed to disclose incentive fees paid to brokerages.

San Mateo, Calif.-based Franklin Resources didn’t admit or deny the findings of the Securities and Exchange Commission, the agency said in a statement. The company will distribute the settlement money among certain funds based on a plan devised by a consultant it retained, Franklin said in a statement.

The SEC contends that between 2001 and 2003 Franklin paid $52 million in commissions using fund assets as part of undisclosed agreements with 39 broker-dealer firms. The government said so-called shelf-space arrangements made by mutual fund companies to brokerages as an incentive to sell their funds should be divulged. They can cause conflicts of interest and raise costs for shareholders, regulators said.

-Bloomberg News

NATIONAL

CARDINAL HEALTH TO CUT 4,200 JOBS, LOWERS FORECAST

Cardinal Health, the second-biggest American drug distributor, said it will eliminate 4,200 jobs and reduced its fiscal 2005 forecast as manufacturers limit the company’s ability to profit from price increases.

Earnings per share for the fiscal year that started July 1 will increase less than the 10% the company had set as its goal, Dublin, Ohio-based Cardinal said in a statement yesterday, without giving a specific forecast. About 25 facilities will be closed worldwide. The board also authorized buying back as much as $500 million in shares.

The job cuts are part of a plan to boost annual earnings by $500 million, the company said. The chief executive, Robert Walter,59,restated more than two years of financial results in September amid government and internal accounting probes. He also is renegotiating payment terms with drugmakers for distribution after manufacturers reduced price increases and cut supplies.

– Bloomberg News

FOREIGN

BOMBARDIER BOARD OUSTS CHIEF EXECUTIVE

Bombardier ousted its chief executive, Paul Tellier, after he failed to stem a decline in profit, shares and credit ratings during his two-year tenure. Mr. Tellier had a year left on his contract.

The stock sank 17% to an 11-year low after Bombardier said yesterday that Executive Chairman Laurent Beaudoin, his son Pierre, and Andre Navarri will run the company in a new office of the president. Bombardier is the world’s biggest maker of train equipment and commercial aircraft that seat up to 100 passengers.

Mr. Tellier, 65, announced more than 16,000 job cuts, closed factories, and sold the company’s recreational products unit as part of a three-year cost-cutting plan. Profit continued to slide, the shares lost more than half their value, and the company’s debt was reduced to junk as aircraft demand slumped and USAirways Group, its biggest customer, sought bankruptcy protection.

– Bloomberg News