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JPMorgan profit plummets on loan losses

JPMorgan Chase & Co's third-quarter profit fell 84%, due to mark-downs on underperforming loans in its leveraged lending and mortgage-related portfolios, the bank said.

The bank posted a write-down of $3.6 billion from its investment banking operations, taking its total credit losses and write-downs since the credit crunch began last year to $12.3 billion, far below that of peers such as Citigroup Inc, which has posted over $50 billion.

“Given the uncertainty in the capital markets, housing sector and economy overall, it is reasonable to expect reduced earnings for our firm over the next few quarters,” said Chief Executive Jamie Dimon.

Shares in JPMorgan fell 21 cents to $41.50 in premarket trading after falling 3% in Tuesday's trading.

The bank last month sold $10 billion of stock to fund its $1.9 billion acquisition of Washington Mutual Inc, the largest bank to fail in US history.

The purchase made JPMorgan the second-largest US bank by deposits but it also saddled the company with the troublesome mortgages that caused painful write-downs and credit losses. As part of the acquisition, JPMorgan wrote down more than $30 billion and said it would incur $1.5 billion in pre-tax costs. (Reuters)