KBW says 71 banks may require $15.2 bln capital

May 12 (Reuters) - Keefe Bruyette & Woods said 71 regional banks, excluding the 19 largest U.S. banks, would need to raise a total of $15.2 billion in capital in the stress-case scenario.

Of the 71 banks that have not undergone the stress test conducted by the U.S. government, Huntington Bancshares Inc (HBAN.O), Zions Bancorp (ZION.O) and Marshall & Ilsley Corp (MI.N) may require capital of $1.82 billion, $1.3 billion and $1.2 billion, respectively, KBW said.

"We have extended our stress case models to capture the full credit cycle, which we expect will continue through year-end 2010," KBW said in a note to clients.

While it has measured capital health at cycle-end, KBW said it has also tried to estimate "trough" levels of capital at the end of 2009 that would incorporate most of the loss for the cycle but not allow for as much of an earnings offset.

The brokerage also revised cumulative loss assumptions to conform to loss guidelines by loan type where appropriate for both the full-cycle and trough time periods.

"Most significantly, we increased loss assumptions for single-family mortgage and construction portfolios to incorporate a slightly more negative outlook," KBW said.

Some other banks that KBW expects to raise additional capital are Colonial BancGroup CNB.N, M&T Bank Corp (MTB.N), PrivateBancorp (PVTB.O) and Astoria Financial Corp (AF.N).

(Reporting by Sandhya Menon in Bangalore; Editing by Mike Miller)

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