Citing continued weakness in the credit card sector and the ongoing effects of the recession, JPMorgan Chase & Co.’s Card Services unit today reported a $306 million net loss for the fourth quarter ended Dec. 31, an improvement from the $371 million the unit lost during the same quarter a year earlier.

 In a statement, Chase attributed the card unit’s loss in part to lower managed loan balances, decreased fee income and “the impact of legislative changes” (tied to the Credit Card Accountability, Responsibility and Disclosure Act passed in May 2009, which takes effect next month and has forced changes in credit card issuers’ interest-rate pricing and fee structures).

Net revenues rose 4.9%, to $5.15 billion from $4.91 billion a year earlier. Chase boosted its provision for losses during the quarter by 6.8%, to $4.24 billion from $3.97 billion. The managed net charge-off rate on credit cards was 9.33%, up 377 basis points from 5.56% a year earlier, but an improvement from the 10.3% the company posted for the third quarter ended Sept. 30. The delinquency rate for card accounts at least 30 days past due was 6.28%, up 131 basis points from 4.97% during the fourth quarter of 2008.

Credit card purchase volume during the quarter fell 9.5%, to $86.9 billion from $96 billion.

Chase established 3.2 million new credit card accounts during the quarter, down 25.6% from 4.3 million a year earlier. As of Dec. 31, Chase had 145.3 million cards on issue, down 13.9% from 168.7 million cards on issue a year earlier.

 On the merchant-acquiring side, Chase Paymentech Solutions processed $110.4 billion in bankcard volume, down 18.3% from $135.1 billion a year earlier. The total number of merchant transactions processed remained flat at 4.9 billion.

During a conference call today with analysts, Michael J. Cavenagh, Chase chief financial officer, said Chase expects the charge-off rate for the cards unit to rise to at least 10.5% toward the middle of this year.

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