American Express Co.'s (AXP) net interest costs will likely rise by $150 million to $200 million in 2009, said Chief Financial Officer Dan Henry at the company's financial community meeting Wednesday.

The additional cost stems from the difference between the company's investments of its excess cash in low-risk low-yielding securities and the higher borrowing costs the company faces while fulfilling its funding requirements, said Henry.

AmEx will invest excess cash in securities such as U.S. government debt, mortgage securities backed by Fannie Mae (FNM) and Freddie Mac (FRE), money-market funds and debt of companies that is insured by the Federal Deposit Insurance Corporation, said Henry.

The company had $21 billion in cash balances as of the end of the fourth quarter.

AmEx reported at the end of January fourth-quarter net income of $172 million, or 15 cents a share, compared with $831 million, or 71 cents a share, a year earlier. The results included a $273 million after-tax charge related to severance programs tied to previously announced layoffs.

The company issues charge cards, which must be paid off each month, as well as credit cards that allow customers to carry a balance. Unlike other card companies, which either issue plastic or process the transactions, AmEx does both. AmEx earns the bulk of its income from card fees it charges consumers and processing fees it charges merchants such as grocery stores and gas stations.

In recent trading Wednesday, AmEx shares were up 1.7% at $16.37.

-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729; aparajita.saha-bubna@dowjones.com