U.S. Bancorp said Wednesday its board of directors approved a plan to slash its quarterly dividend on common stock by 88 percent.

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

U.S. Bancorp cut its dividend because of "uncertainty in the financial markets and a weakening economy," the company's president and chief executive, Richard Davis, said in a statement.

Dozens of banks have been slashing their dividends in recent months amid the ongoing credit crisis and recession. With banks facing mounting loan losses, dividend cuts have been used to help preserve capital to cover those expected losses.

Davis added the bank will return the dividend to "a normalized rate as soon as possible," though no further details were provided.

U.S. Bancorp also declared dividends on two classes of preferred stock. Series B non-cumulative perpetual preferred stock holders will receive a dividend of $218.75 per share. Series D non-cumulative perpetual preferred stock holders will receive a dividend of $492.19 per share. Those dividends will also be paid April 15 to shareholders of record on March 31.