Still, JPMorgan admits that it won't begin to see the fruits of these efforts for at least two years.

The Chase Card unit posted a loss of $700 million in the three months ended Sept. 30 and $1.9 billion for the first three quarters of fiscal 2009. CEO Jamie Dimon warned earlier this year that the business would not make a profit in 2009 and losses for the first half of 2010 are likely to come in "north of $1 billion." Loan losses remain at record levels, and the unit's legacy credit card portfolio had a managed net charge-off rate of 9.41% in the September quarter.

Losses in the credit card portfolio of Washington Mutual, which JPMorgan bought in September 2008, have been far worse. The company says that charge-offs in the WaMu portfolio, primarily consisting of subprime accounts where the standards for receiving lines of credit were too lax, could rise to 24% by mid-2010. The company is currently working to wind down that portfolio, and Chase Card CEO Smith says they won't be extending further credit to the majority of those borrowers.

The industry is going to be a "slightly smaller business because people are going to cut back credit in subprime and places that can't manage the risk properly. W e think it will be a great business coming out of that, but you really won't see the results of that until 2011 and 2012," Dimon said during the October conference call for the company's third-quarter results.

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