“We do expect the near-term environment to be very challenging,” Mr. Kelleher said. “This recession has turned global in a relatively short time frame.”

The bank is trying to chart a new course as a deposit-taking institution, which will provide new types of earnings as well as a steady base of financing for some of the bank’s operations. But the makeover includes a retrenchment from areas that once provided handsome profits like proprietary trading, principal investing and prime brokerage, the business that services hedge funds.

Morgan  and its closest rival, Goldman Sachs  have yet to prove they can find new ways to churn out high profits again in the new environment. Goldman reported a quarterly loss of $2.1 billion on Tuesday, its first loss ever. Investors pushed Goldman’s stock upward on the news, because the loss was not as bad as some had feared.

Much of Morgan’s woes continue to relate to investments it made before the credit crisis began. The bank continued to take losses on those all year, but in the last three quarters, revenue outweighed those losses. In the fourth quarter, the worst losses came from mortgage investments, private equity and real estate.

The bank’s loss this quarter was less than its fourth-quarter loss last year of $3.6 billion, or $3.61 a share, when Morgan took the bulk of its mortgage write-downs. But profit this year was down over all 49 percent  to $1.59 billion  from last year, when it was $3.14 billion.

Morgan’s pain was most concentrated in the bank’s asset management unit, where revenue was a negative $386 million, down 160 percent from the third quarter. The unit was stung by a $187 million loss related to structured investment vehicles on its balance sheet and write-downs on real estate and private equity in its merchant bank. It also took a $243 million impairment charge on its Crescent real estate subsidiary. And customers also withdrew $76.5 billion of assets from the unit, leaving Morgan with much lower fee revenue.

The institutional securities group also suffered from write-downs, recording revenue of $844 million, down 86 percent from the third quarter. The tally of losses included: $1.2 billion on mortgage assets, $1.1 billion of write-downs on loans related to buyout commitments and $1.8 billion in loses in real estate and other investment funds. And revenue in businesses like underwriting, equity sales and credit products remained lower than a year ago.