Banks undergoing U.S. government stress tests will need a total of $75 billion in capital, with Bank of America and Wells Fargo having the largest need, analyst Keith Horowitz of Citigroup said.

The analyst expects 10 of 16 banks he covers, including KeyCorp, Regions Financial Corp and U.S. Bancorp, to raise capital after the stress tests.

While Bank of America is likely to need a substantial increase in common stock, the brokerage said it believes the bank can cover it via conversion of preferred stock.

"The Bank of America stock looks the cheapest in the group," the analyst said.

He said he expects Bank of New York Mellon, Goldman Sachs and State Street Corp to fare best on the stress tests, and believes valuations for these stocks remain attractive.

Citigroup also downgraded Fifth Third to "hold" from "buy" and said the bank may need to raise upwards of $2 billion in capital, which is higher than the private preferred balance of $1.1 billion.