American Express Co. has slashed its marketing expenses so much that analysts are wondering whether the lender may be boosting short-term profit at the expense of its brand.

Amex reduced second-quarter marketing and promotion by $311 million, or 47%, compared with the year earlier.

"You can cheat your brand for a little bit and not lose, but do it for too long and people start forgetting about you," said Bart Narter, the head of the banking group at the Boston research firm Celent.

Amex profit dropped 48% in the quarter, its seventh straight decline, from the year earlier. The company told investors last week that managed loan writeoffs fell to 9.2% in July, from 9.9% in June, the third monthly decline.

The company's chief executive, Kenneth Chenault, said he will spend more on marketing for the rest of this year if the trend continues.

The company began airing its first brand-building television spot of the year July 22, a spokeswoman, Joanna Lambert, said.

"American Express periodically goes through these rounds of significant cost cutting and then finds that they can't run at that cost level over the longer term," said Credit Suisse analyst Moshe Orenbuch, who has rated Amex shares "underperform" since September 2002.

The lender is "selectively" advertising products such as its pay-in-full charge card and rewards credit cards, including those cobranded with Delta Air Lines Inc. and Starwood Hotels & Resorts Worldwide Inc., Lambert said.

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