WASHINGTON (Reuters) - JPMorgan Chase & Co said it has racked up $1.5 billion of losses so far this quarter on mortgage-linked assets, reflecting deepening turmoil in credit markets.

Shares of the third-largest US bank by assets fell as much as 7.9 percent, reflecting investors' disappointment with a bank that had largely side-stepped the worst of the credit crunch.

Chief executive Jamie Dimon has kept JPMorgan profitable even as rivals such as Citigroup Inc and Merrill Lynch & Co posted a series of multi-billion dollar quarterly losses. The bank revealed the losses in a regulatory filing late on Monday.

"If you're a huge global trading house, it's very hard to hide from the devastation," said Steve Persky, chief executive at Dalton Investments in Los Angeles.

JPMorgan said trading conditions have "substantially deteriorated" in the third quarter, and mortgage-backed securities and loans have weakened. The New York-based bank also has substantial exposure to credit cards and other consumer debt that looks increasingly vulnerable as the nation's economy grows slowly.

The Financial Times yesterday said JPMorgan is under pressure to write down mortgage assets, in part because of Merrill's decision to sell $30.6 billion of repackaged debt to a private equity fund at 22 cents on the dollar.

As of June 30, JPMorgan held $19.5 billion of prime and Alt-A mortgage exposure, $1.9 billion of sub-prime mortgage exposure, and $11.6 billion of commercial mortgage-backed securities (CMBS) exposure, Monday's filing showed.

"These mortgage exposures could be adversely affected by worsening market conditions, further deterioration in the housing market and market activity reflecting distressed sellers," JPMorgan said. Loss estimates exclude hedging, it said.