JPMorgan Chase & Co said on Wednesday quarterly profit fell a worse-than-expected 24 percent as the No. 3 U.S. bank lost $1.3 billion on risky mortgages and set aside more money for rising losses on home-equity and auto loans.

The bank quadrupled to $1.1 billion the provision it needs to cover continued problems on home equity and subprime mortgage loans.

We remain extremely cautious as we enter 2008, JPMorgan Chief Executive Jamie Dimon said in a statement. He said a worsening U.S. economy would boost consumer credit losses beyond current levels.

JPMorgan reported fourth-quarter income from continuing operations of $2.97 billion, or 86 cents a share, down from $3.91 billion, or $1.09 a share, in the year-earlier quarter.

Analysts, on average, had looked for JPMorgan to earn 91 cents a share, according to Reuters Estimates.

(Reporting by Tim McLaughlin; Editing by Derek Caney)

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