UPDATE 2-Wall Street profit may hit $19 billion in 2010

* Fourth-most profitable year, but down 69 pct from 2009

* New York comptroller says banks adjusting to reforms

* Bonuses uncertain, though individual payouts may rise (Adds details, byline)

NEW YORK, Nov 16 (Reuters) - Wall Street may earn $19 billion in 2010, its fourth-most profitable year, even as regulatory changes and a weakened economy limit its ability to generate profit, New York state’s comptroller said.

The comptroller, Thomas DiNapoli, also said that while it is too soon to predict bonuses, the average payout may rise because banks are shedding jobs and a smaller pool of people wll be eligible to get bonuses.

In a report released on Tuesday, DiNapoli said total profit may slide 69 percent from $61.4 billion in 2009 as Wall Street boosts capital reserves, curbs riskier transactions and focuses on long-term performance more than short-term gains.

DiNapoli said Wall Street has nonetheless benefited from federal bailouts and low interest rates, and may see profitability settle near levels that prevailed prior to 2007 and 2008, when it lost $54 billion overall.

“Wall Street is adjusting to regulatory reforms and learning how to do business in the new financial reality,” DiNapoli said in a statement.

The dollar amounts reflect broker-dealer operations of New York Stock Exchange member firms, according to the report. Wall Street profit topped $20 billion in 2000 and 2006, as well as in 2009, the report said.

DiNapoli expects to provide his annual tally of Wall Street bonus payouts in early 2011. Overall Wall Street bonuses totaled $20.3 billion in 2009, up 17 percent from 2008.

According to the pay consultant Johnson Associates Inc, Wall Street workers may see individual bonuses rise an average 5 percent this year, though weak trading results may lead to declines for some employees. [ID:nN15197617]

DiNapoli said about 31,000, or one-sixth, of all Wall Street jobs have disappeared since the end of 2007.

“The industry continues to restructure and downsize as it adapts to changes in its economic and regulatory environment,” the report said.

Even when job growth resumes, however, tax receipts may remain too low to address state and local budget woes, DiNapoli said. The state’s shortfall could reach $1 billion this fiscal year and $9.5 billion the year after, he said. [ID:nN15264864]

DiNapoli also oversees the $132.8 billion New York State Common Retirement Fund, one of the nation’s biggest public pension funds. (Reporting by Jonathan Stempel; Additional reporting by Michael Erman; Editing by Lisa Von Ahn, Dave Zimmerman)