Citigroup, the largest U.S. Bank, is looking to raise an additional $3 billion in capital as it seeks to stabilize its finances, announcing on Monday that it is offering more stock to investors.

The common stock offering will raise the bank's Tier 1 capital ratio to about 8.5 percent. U.S. regulators require at least 6 percent in Tier 1 capital to qualify a bank as well-capitalized.

Banks prefer to avoid forced sales of common stock as it dilutes the earnings of current shareholders.

Citigroup has suffered heavy losses to financial products tied to the suffering housing industry, forcing the bank to reduce the value of its products by billions of dollars.

In its latest quarter the bank said it lost $5.1 billion.

We are issuing common equity at this time as we continue to optimize our capital structure, said Gary Crittenden, Chief Financial Officer of Citigroup. We're pleased with the strong interest we have already received regarding this issuance.