A branch of the Bank of America in New York City (File)

The U.S. government is considering a fresh, multi-billion dollar aid package for Bank of America, the nation's largest bank.

Bank of America is seeking billions of dollars of government help to help it absorb losses tied to its acquisition of Merrill Lynch, a troubled investment firm it purchased on January 1.

Reports say the bank requested additional rescue funds after realizing losses at Merrill Lynch were much higher than expected.

Bank of America has already received $25 billion from the federal government's Troubled Asset Relief Program, which was put in place last year to help rescue the financial sector.

Shares for both Bank of America and another financial firm, Citigroup, plunged more than 20 percent in early trading Thursday.

Separately, another major U.S. bank, J.P. Morgan Chase, Thursday announced a 76 percent drop in fourth quarter profits as it continues to write down bad loans.

The bank's chief, Jamie Dimon, released a statement saying if the economy continues on a downward spiral as expected, further losses can be expected.

Some information for this report was provided by AFP, AP and Reuters.