Third-quarter income dropped $1,893 million in write downs and the bank cited the continued problems of the financial markets as a cause for the losses.
This quarter last year saw the investment banking division make $652 million but in 2007 it returned just $5.1 million operating earnings.
Residential mortgage-backed securities and structured products suffered $0.8 billion in write downs.
Income in private banking saw a 26 per cent increase in profits to $1.1 billion while the asset management division saw earnings drop by 85 per cent to $38.7 million.
Speaking to the Guardian, Brady Dougan, chief executive, said: "We are seeing encouraging signs that activity in credit markets is increasing although it is too early to predict when all of the affected markets will return to more normal levels."