NEW YORK, Nov 7 (Reuters) - JPMorgan Chase & Co said in a filing on Friday it expects consumer loans to worsen in the fourth quarter and sees an increase in loan loss provisions.
The bank has more than $395 billion in consumer loans, with the largest chunk in home equity, and mortgages, credit cards and auto loans also in the portfolio.

"Given the potential stress on the consumer from rising unemployment, the continued downward pressure on housing prices and the elevated national inventory of unsold homes, management remains extremely cautious," the bank said in the filing.
JPMorgan expects write-offs of bad loans in its home lending portfolio to increase in the fourth quarter and into 2009, the filing said.
In addition, the bank said the charge-off rate for its credit card business may rise over 5 percent in the fourth quarter and increase further in 2009.
The net charge-off rate for its managed credit cards climbed to 5 percent in the third quarter from 3.64 percent in the same period last year.
Separately, the bank said it expects to see an aftertax gain of about $600 million in the fourth quarter from the dissolution of an entity called Chase Paymentech Solutions, a joint venture with First Data Corp.
Shares in JPMorgan were down 3 cents in premarket trading on Friday at $38.23, after closing at $38.26 on Thursday.

(Reporting by Elinor Comlay; editing by Jeffrey Benkoe) Keywords: JPMORGAN/OUTLOOK (elinor.comlay@thomsonreuters.com; +1 646 223 6116)

COPYRIGHT

Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.