LONDON (MarketWatch) -- Wall Street giants Citigroup Inc. and Merrill Lynch & Co. are both negotiating further capital injections from overseas investors as they continue to suffer from the credit market crisis, according to a published report Thursday.

Citigroup C, -2.12% could get as much as $10 billion from foreign governments and Merrill Lynch MER, +27.69% is expected to receive $3 billion to $4 billion, with much of the cash coming from a Middle Eastern government investment fund, The Wall Street Journal reported.

“ 'As long as Merrill's fourth-quarter write-down comes in under $15 billion, the company would remain well capitalized.' ” — Brad Hintz, analyst

Citi is also expected to consider slashing its dividend in half in a move that would save it around $2.5 billion a year, the newspaper reported.

Both firms are rushing to finalize the deals before they report earnings next week, which will likely include further losses from exposure to mortgage-related securities, such as collateralized debt obligations.

Merrill is likely to write down the value of its CDO and subprime mortgage-backed security exposures by $10 billion next week, Bernstein Research estimated. Such hits have increased concern that banks and brokerage firms may not be capitalized well enough and sent many companies in search of fresh cash.

"As long as Merrill's fourth-quarter write-down comes in under $15 billion, the company would remain well capitalized," Brad Hintz, an analyst at Bernstein, wrote a note to client on Thursday. "A $20 billion write-down this quarter or above would significantly increase leverage and would threaten the credit ratings of the firm."

The firm has three main options for boosting capital: raise new money from outside investors again; sell its stake in financial data company Bloomberg LP (worth roughly $4 billion); or cut Merrill's fixed-income business by one-third to free up about $3 billion of capital, Hintz explained.

Fresh capital injections would come just weeks after Merrill, Citigroup and others first tapped financing from overseas investors.

In late November Citigroup got a $7.5 billion injection from Abu Dhabi Investment Authority, which gave the investor up to a 4.9% stake in the group as well as annual interest payments of 11%. See full story.

Merrill, meanwhile, said in late December that it would raise up to $6.2 billion from Singapore-based investment firm Temasek Holding and U.S. money manager Davis Selected Advisers.

Other firms that have looked to the Middle East and Asia to help shore up their capital include Morgan Stanley MS, -2.35% and Switzerland's UBS UBS, -0.54% .

Citigroup and Merrill shares were mixed during earlier afternoon trading on Thursday. Bank stocks in general got a boost after Federal Reserve Chairman Ben Bernanke said monetary policymakers are ready to take substantial additional action.

The Journal reported that Citigroup's board is expected to meet on Monday to discuss the financing and potential dividend cut.

Citigroup had previously said its dividend was safe, but newly installed Chief Executive Vikram Pandit is seen as more willing to consider radical steps and is also expected to announce major job cuts, the newspaper reported.