The board of directors of U.S. Bancorp (USB) has finally decided to slash its quarterly dividend by 88%, as the company looks to preserve cash.

The latest move follows recent dividend cuts from JP Morgan (JPM) and PNC Financial (PNC), which slashed their quarterly dividends by 87% and 85% respectively in an effort to conserve cash, amid the ongoing credit crisis and recession.

The dividend will be cut to 5 cents per common share from 42.5 cents per common share, which will be paid April 15 to shareholders of record as of March 31.

The company paid a dividend of 42.5 cents a common share in the second quarter last year.

The decision  will help the Minneapolis based bank save approximately $2.6 billion dollars annually. However, the bank also announced that it would be reinstating its dividends whenever the economic picture stabilizes.

It may be noted that, U.S. Bancorp received $6.6 billion in November under the Troubled Asset Relief Program.

At 9:50 am, the scrip of U.S. Bancorp was trading at $12.26 on NYSE, down 3 per cent compared to previous close of $12.58.