JPMorgan Chase & Co.'s profit tumbled 84 percent in the third quarter after it took big hits from souring mortgage investments, leveraged loans and home loans. Profit at the New York-based bank, considered one of the stronger players in the current financial meltdown, came in better than Wall Street anticipated. But the deterioration seen in all types of loans - from home equity loans to prime mortgages to credit cards - bodes badly for a banking industry that is requiring unprecedented investment from the federal government. Both CEO Jamie Dimon and CFO Mike Cavanagh said that they expect the economy to weaken further, and loan losses to keep piling up along with it. “It's an unpleasant situation, and I don't want to underplay it. It's unpleasant for the country,” said Dimon during a conference call. “I hope that the financial crisis, with the powerful moves made by governments around the world, will start to ease.” The company earned $527 million, or 11 cents per share, compared with $3.4 billion, or 97 cents per share, a year earlier. Analysts polled by Thomson Reuters had predicted a loss of 21 cents per share. Still, revenue fell below expectations, dropping nearly 20 percent to $14.74 billion from $18.40 billion in the third quarter of 2007. Analysts predicted revenue of $16.01 billion. JPMorgan's investment bank wrote down $3.6 billion from its mortgage investments and leveraged lending exposures, and boosted loan loss reserves by $1.3 billion to $15.3 billion to prepare for a worsening environment for lending. Home equity loans continue to deteriorate - charge-offs rose to $663 million from $511 million in the previous quarter and $150 million a year ago. Subprime and prime mortgage trends are worsening, too. Subprime charge-offs rose to $273 million from $192 million in the second quarter and $40 million a year ago.
