JPMorgan profit tops view

By Jonathan Stempel

NEW YORK (Reuters) - JPMorgan Chase (JPM.N) said record investment banking and trading results drove quarterly profit 36 percent higher, topping Wall Street forecasts, but reported a surge in consumer credit losses that foreshadows deeper problems on Main Street.

Though the second-largest U.S. bank is among the nation's healthiest major lenders, it more than doubled the amount set aside for bad loans, to $9.7 billion (5.9 billion pounds). JPMorgan expects its credit card business to lose money this year and next, and sees higher commercial real estate losses for several quarters.

"We're still obviously in a pretty big recession," Chief Executive Jamie Dimon said on a conference call.

He said rising unemployment will put upward pressure on credit losses.

Results nonetheless benefited from improving credit markets and regulators' efforts to stimulate the economy by keeping borrowing costs low, bolstering mortgage and other lending.

"The bank has done reasonably well on the trading side and less well on the home and private lending side," said Peter Dixon, an economist at Commerzbank in London.

JPMorgan shares closed down 13 cents at $36.13 on the New York Stock Exchange. They have risen 15 percent this year, while the KBW Bank Index .BKX is down 14 percent.

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