UPDATE 3-JPMorgan sees card losses near 9 pct this quarter

* JPMorgan sees card losses nearing 9 pct in Q2

* Sees $700-$750 mln pretax FDIC charge

* Sees $500 mln cost from credit card law changes

* Eyes early TARP repayment; hopes to raise div

* JPMorgan shares down 5 cents (Adds JPMorgan CEO comments)

NEW YORK, May 27 (Reuters) - JPMorgan Chase & Co's (JPM.N) credit card losses will near 9 percent of its card portfolio in the second quarter and might rise even further if unemployment increased, Chief Executive Jamie Dimon said, after earlier saying card losses "could" hit that level.

The second-largest U.S. bank is also looking to repay its $25 billion of U.S. government bailout funds "as soon as possible" and hopes to raise its recently lowered dividend as early as late this year "if we're lucky" -- provided conditions improve, Dimon said.

Speaking at a Sanford C. Bernstein conference, Dimon said home lending losses over the next several quarters will be as high as $1.4 billion in home-equity, $500 million in prime mortgage and $375 million to $475 million in subprime mortgage.

JPMorgan's investment banking unit seems to be "OK" so far this quarter, Dimon added.

JPMorgan emerged as the top bookrunner to U.S. equity and equity related offerings this year, according to Thomson Reuters data. Analysts believe banks will see better investment banking results in the second quarter, benefiting from their participation in a boom in the U.S. secondary offering activity.

Dimon still expects the credit card business to lose money every quarter this year, hurt by a slowdown in consumer spending, although the bank's market share could rise.

Recent credit card law changes could also cost the company $500 million annually after tax, Dimon said.

President Barack Obama signed into law on Friday sweeping reforms that restrict credit card interest rates and fees to help recession-weary consumers.

"It does make it harder to manage risk," Dimon said. "I think the business will essentially get repriced. It will be slightly smaller."

JPMorgan will likely incur $700 million to $750 million of pretax charges related to the special assessment fee charged by the Federal Deposit Insurance Corp, either this quarter or in the next couple of quarters, Dimon said.

Dimon said the company is targeting a dividend payout of 30 percent to 40 percent of normalized earnings, but added he wants to see conditions improve before raising the dividend.

Speaking separately at the same conference, Discover Financial Services (DFS.N) Chief Executive David Nelms said he expects loan growth to slow in the second half of this year.

Nelms also expects the charge-off rate, the percentage of debt the company does not expect to be repaid, to be about 8 percent on a managed basis in the second quarter. In the first quarter, Discover's rate was 6.48 percent.

Discover will also continue to set aside more money to cover bad loans, Nelms said.

With default rates at record levels, credit card companies are among the victims of an economic crisis that began with the U.S. housing market collapse and which has spread around the world.

JPMorgan shares were down 5 cents at $36.48, while Discover was up 1 percent at $8.98 in afternoon trading on the New York Stock Exchange. (Reporting by Tenzin Pema and Jonathan Stempel, editing by Gerald E. McCormick and Andre Grenon )