JPMorgan Chase took a $1.3 billion writedown on the value of its subprime positions in the fourth quarter, including marks against its collateralized debt obligation portfolio. JPM -- which has been relatively unscathed by the subprime crisis (up until now) -- said it increased its loan loss allowances by $395 million in the quarter because of anticipated mark downs on high loan-to-value mortgages, including home equity loans. Even though JPM wrote down the value of its subprime CDOs, its mortgage banking division had net income of $332 million, it said. Its mortgage business was helped, in part, by a $499 million upward adjustment in the value of its mortgage servicing rights. Overall, the bank/investment bank earned $124 million in the quarter, an 88% drop from the same period last year.

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