U.S. bank shares rose on Monday after analysts said government stress tests of financial institutions would show most would need less new capital than previously feared.

The KBW Bank index <.BKX> jumped almost 5 percent, as shares of Citigroup climbed more than 6 percent to $3.15, Bank of America gained more than 5 percent to $9.21, and JPMorgan added 4.3 percent to $33.91.

The stress tests are a government exercise to help regulators gauge what additional capital the largest 19 U.S. banks would need under a range of economic scenarios.

The results are expected to be made public on Thursday.

We expect the following ... (a) a few banks are cited as projecting a possible deficiency, giving the test credibility in the eyes of critics; and (b) most of the banks on that list will have only modest shortfalls, thus bank stocks won't collapse, David Trone, Fox-Pitt Kelton bank analyst, said in a research note.

Citigroup would pass the test for potential capital deficiency, Trone said.

Shares of Wells Fargo shot up 9.2 percent to $21.40, while the S&P financial index <.GSPF> rose 3.7 percent to $148.24.

Investor Warren Buffett heaped praise on Wells Fargo over the weekend, saying the bank was fabulous. Wells represents one of the biggest investments by Buffett's Berkshire Hathaway Inc. .

Citigroup is looking to raise any additional capital it might need from private investors rather than giving more control to the government, Bloomberg reported on Monday, citing people briefed on the matter.

A Citi spokesman was not immediately available for comment.

Bank of America denied it was working on plans to raise more than $10 billion in fresh capital as reported by the Financial Times. The bank called the report completely inaccurate.

(Reporting by Ellis Mnyandu; Editing by Kenneth Barry)

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