US banking sector needs $1 trillion in capital

U.S. banks including Bank of America Corp, JPMorgan Chase & Co and Wells Fargo & Co may need to raise $1 trillion of capital, Keefe, Bruyette and Woods analysts said in a report on Thursday, after they stress tested the industry.

The brokerage performed its own stress tests a day before the government is due to brief 19 banks on their performance in its test, which U.S. Treasury Secretary Timothy Geithner has said is designed to determine the capital needs of banks.

The government is testing 19 banks and KBW applied its tests to the 17 it covers within this group.

Bank of America, JPMorgan, KeyCorp, PNC Financial Services Group Inc, Wells Fargo and Fifth Third Bancorp are among the banks that may need to raise capital, the brokerage said, according to its own analysis.

Under KBW's estimates, however, Capital One Financial Corp , Morgan Stanley and U.S Bancorp can avoid raising capital.

On Tuesday, Geithner said most U.S. banks have enough capital to keep lending, but a pile of bad debts is fostering doubts about their health and slowing a recovery

The results of the government's tests, including a capital recovery plan for the banks that need more capital under stressed conditions, will be publicly disclosed May 4, a regulatory official said last week.

According to KBW's test, Bank of America Corp has a higher risk than its peers to be forced by the U.S. government to receive yet another round of government capital from the Capital Assistance Program (CAP).

The brokerage expects Bank of America to take between $15 billion and $20 billion of CAP. I

(Reporting by Supantha Mukherjee in Bangalore and Elinor Comlay in New York)

NEW YORK, April 23 (Reuters) -