Citigroup Inc said on Wednesday it has sold $4.5 billion of common stock, 50 percent more than originally expected, at a discount to raise capital, a sale that dilutes the holdings of existing shareholders.

The sale means the largest US bank has raised more than $40 billion of capital since late last year. Citigroup has struggled with debt write-downs and credit losses, and posted net losses of close to $15 billion over the last two quarters.

Shares of Citigroup, a Dow Jones industrial average component, fell 77 cents to $25.55 in premarket electronic trading.

New York-based Citigroup is one of many banks, including Bank of America Corp and Wachovia Corp, to this year raise capital by issuing preferred or common stock.

"Most of these banks keep saying they don't need more capital and then they raise more," said Walter Todd, a portfolio manager at Greenwood Capital Associates LLC in Greenwood, South Carolina, which does not own Citigroup shares.

"Ending capital raises will help these stocks find a bottom."    

Citigroup said it priced 178.1 million shares at $25.27 each, a 4 percent discount to its Tuesday closing price.

It said it may sell another 17.8 million shares to meet demand, which would boost the offering to $4.95 billion. Citigroup's market value was about $138 billion on Tuesday.

Citigroup on Tuesday announced plans to sell $3 billion of common stock. Chief Financial Officer Gary Crittenden said it increased the offering "in response to strong demand from a broad base of investors.

The sale came barely a week after Citigroup sold $6 billion of preferred stock. A few days before that, on April 18, Crittenden told investors he wouldn't rule out more capital raising. "You can never say never," he said. - Reuters