Bank of America Corp and Citigroup Inc shares have roughly tripled from multi-decade lows set less than a month ago, and powered higher on Wednesday on speculation their recent punishing declines might have been too severe.

Shares of Bank of America rose above $7 for the first time since February 9, while Citigroup rose above $3 for the first time in a month. The largest and third-largest U.S. banks are both in the Dow Jones industrial average <.DJI>.

The banks have gotten federal bailouts that limited losses on troubled assets, and have split $90 billion of capital from the Treasury Department's Troubled Asset Relief Program (TARP).

But sentiment grew after Bank of America Chief Executive Kenneth Lewis and Citigroup Chief Executive Vikram Pandit last week said the banks were profitable in January and February.

Lewis added in an interview published on Wednesday in the Charlotte Observer that Bank of America might be able to repay its TARP money late this year.

Meanwhile, the Financial Accounting Standards Board on Wednesday issued proposals to help companies apply so-called mark-to-market accounting rules. Critics of these rules say they have convulsed banks by forcing writedowns of assets to artificially distressed levels, depleting capital.

Some of the accounting uncertainty may start to be lifted, and that could alleviate some concerns with regard to capital adequacy, said Blake Howells, director of equity research, Becker Capital Management in Portland, Oregon.

Analysts said investors may also be redeploying assets in beaten-down stocks. I think there's a combination of short covering and maybe some longs (long-term investors) participating because they feel that the political, regulatory and accounting situation is improving, Howells said.

In the newspaper interview, Lewis said Bank of America could repay its TARP money now, but wanted to maintain excess capital because of the current fragile financial system.

He also said the January 1 acquisition of Merrill Lynch & Co will be a long-term success. Lewis said the bank will achieve 45 percent of its expected merger savings this year, and that one-fourth of an expected 35,000 job cuts have been made.

Bank of America in the October-to-December period had its first quarterly loss in 17 years, and has slashed its quarterly dividend to a penny per share. Citigroup has lost $37.5 billion over the last five quarters, and has eliminated its dividend.

In afternoon trading, Citigroup was up 59 cents, or 23.5 percent, at $3.10, while Bank of America was up 96 cents, or 15.3 percent, at $7.23.

Citigroup shares bottomed at 97 cents on March 5, while Bank of America touched $2.53 on February 20.

Longer-term investors have a long way to be made whole.

Citigroup traded at $56.66 as recently as December 2006, while Bank of America hit $55.08 a month earlier.

(Reporting by Elinor Comlay and Jonathan Stempel; Additional reporting by Emily Chasan, editing by Dave Zimmerman)